Wall Street futures edged lower on Wednesday as rising Treasury yields and a rebound in oil prices made investors more cautious after the S&P 500 and Nasdaq closed at record highs a day earlier.
Brent crude climbed back above $100 a barrel as concerns over Middle East supply disruptions persisted. The increase in energy prices has renewed worries about inflation and the possibility that the Federal Reserve may keep interest rates higher for longer.
The yield on the 30-year US Treasury bond rose to around 5.70%, its highest level since 2002. The increase in borrowing costs has put pressure on interest-rate-sensitive sectors, with housing stocks among the biggest decliners during Wednesday’s trading session.
Investors were also awaiting the minutes of the Fed’s September meeting for clues about the central bank’s next moves. Traders largely expect rates to remain unchanged at the October meeting, although a further increase in December remains priced into markets.
At the open, the Dow Jones Industrial Average fell 0.63%, while the S&P 500 dropped 0.42% and the Nasdaq Composite declined 0.56%. Technology shares including Micron and Marvell also came under pressure.
Attention is expected to shift toward the third-quarter corporate earnings season, which begins next week. Analysts expect S&P 500 earnings to have grown about 30.6% from a year earlier, led by energy and technology companies.
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