US Stock Futures Show Divergence as Oil and Treasury Yields Rise
While crude oil prices and the yield on the 10-year Treasury continued to rise, stock futures showed a mixed reaction and were mostly unchanged on Thursday in anticipation of a wholesale inflation data. Futures for the Dow Jones Industrial Average and S&P 500 suggested rises of 0.2% and 0.1%, respectively, while futures for the Nasdaq 100 showed a decrease of 0.2%. Yesterday, the three major U.S. stock indexes recorded a decline for the third consecutive session, as Treasury yields climbed to their highest level in nearly three years. This movement followed a Treasury Department buyback operation that did not meet the expectations of certain bond traders. A day prior to the significant Consumer Price Index inflation reading for August, which may influence the Federal Reserve’s decision on interest rate adjustments at its upcoming policy meeting, investors will focus on the Producer Price Index data set to be released at 8:30 a.m. today. Wholesale prices are projected to have risen by 5.3% compared to the same month last year in August.
Ahead of the reading, the 10-year Treasury yield was above 4.86%, up two basis points from Wednesday’s close-the highest closing level since October 2023. The yield had surged yesterday in response to the Treasury’s announcement of a $6 billion buyback operation, scheduled to begin today, targeting longer-term bonds. Traders currently assign a 64% likelihood to the Federal Reserve raising interest rates at its forthcoming meeting, as indicated by the CME Group’s FedWatch tool. Oil prices continued to rise following a report, citing U.S. officials, that “top White House advisers have raised privately with President Trump the prospect that the Iran war could drag on through the remainder of his term.” Brent crude futures, the international benchmark, saw an increase of nearly 1%, exceeding $102 a barrel after crossing the $100-a-barrel threshold for the first time since July 23 yesterday. U.S. benchmark West Texas Intermediate prices saw a rise of 1.5%, nearing $97.50.
Bitcoin was trading below 78,000, reflecting a slight decline over the past 24 hours. The U.S. dollar index, which tracks the value of the greenback against a selection of foreign currencies, held steady at 98.79. Gold futures experienced a decrease of 0.5%, concluding at a price of $4,440 per ounce. The Magnificent Seven mega-cap tech stocks demonstrated a varied performance ahead of the market opening, whereas the Roundhill Magnificent Seven ETF maintained a position of relative stability. Yesterday, all of the septet experienced declines, with the exception of Meta Platforms, which surged by over 6.5% following remarks from Alexandr Wang, the chief AI officer of the Facebook parent company, who indicated that the utilisation of its new Muse AI agent had significantly exceeded their initial projections.
Meta shares increased by an additional 1.5% in premarket trading, while Apple stock saw a rise of over 1% following a 0.3% decline on Wednesday, after the iPhone maker introduced its latest products, which include its inaugural foldable iPhone. In the aftermath of earnings reports, shares of a medical devices manufacturer The Cooper Companies experienced a decline of 15%, while retailer American Eagle Outfitters saw a decrease of 12%. Conversely, drone manufacturer AeroVironment experienced an uptick of nearly 7%. Macy’s was scheduled to report results before the market opened, while Oracle and Adobe were expected to do so after the market closed.
