Oil Prices Break $100, Rattling US Stock Futures
US stock index futures traded broadly lower ahead of the New York market open on Wednesday (local time) as international oil prices climbed above $100 a barrel and US Treasury yields (the interest return earned on bonds) surged. As of 8:40 a.m. ET, Dow Jones 30 futures were down 391 points (0.75%), S&P 500 futures fell 0.42%, and Nasdaq 100 futures slid 0.75%. In premarket trading, Micron Technology dropped nearly 3%, while other chip stocks including AMD, Broadcom, and Marvell Technology fell 1–3%, and SpaceX declined nearly 2%.
Brent crude, the international benchmark, rose about 1% to trade near $101 a barrel amid persistent supply concerns in the Middle East, while US West Texas Intermediate (WTI) traded close to $90 a barrel. The yield on the 10-year US Treasury note stood at 5.335% and the 30-year bond at 5.713%, with the 30-year holding at its highest level since 2002. The US Treasury Department held an auction of $39 billion in 10-year notes on the day.
The minutes of the Federal Reserve's September Federal Open Market Committee (FOMC) meeting were released the same day. The Fed raised its benchmark rate at last month's meeting for the first time since 2023. "It is unlikely that the Fed's recent rate hike will slow the unusually strong expansion of AI infrastructure," said Emin Hajiyev, senior economist at Insight Investment. "Instead, tighter monetary policy is more likely to weigh on traditional sectors of the economy, which are already sensitive to high borrowing costs," he explained.
The previous session, Wall Street rallied on artificial intelligence (AI) optimism, with the S&P 500 closing above 7,800 for the first time ever and the Nasdaq also setting a fresh record high. The Dow, by contrast, remained about 5% below its record closing high from August 5, underscoring how the rally has been concentrated in large-cap tech and AI-related stocks.
Earnings reports showed mixed results. Constellation Brands fell more than 3% despite beating expectations for its fiscal second quarter (earnings per share of $3.74, revenue of $2.63 billion), hurt by a decline in operating margins in its beer business and a lowered annual outlook. Penguin Solutions, meanwhile, jumped more than 4% on better-than-expected results and a raised annual revenue forecast, and Neogen surged 13% after raising its annual revenue guidance to $885–890 million.
Third-quarter earnings season for US companies kicks off next week. According to LSEG data, analysts expect S&P 500 companies' net profit for July–September to grow 30.6% year over year. Within that, energy companies' net profit is expected to rise 114.7% and technology companies' 66.5%.
