Wall Street futures kick off September under pressure as yields, oil prices rise

Wall Street stock index futures started September on a down note on Tuesday. The Dow E-minis fell 0.4%, S&P 500 E-minis dropped 0.47% and Nasdaq 100 E-minis declined 0.9%. Investors were hesitant as bond yields rose and oil prices surged, casting a shadow over the month traditionally known for weak stock performance. The rise in bond yield rates has soured market sentiment, while Middle East conflicts have heightened concerns about potential interest rate increases to curb price pressures.

US Treasuries' yields reached their highest levels in months, further dampening appetite for riskier equities.

Economist Richard de Chazal of William Blair noted that while yields may not rise sharply, the era of low rates is unlikely to return soon. The majority of risks still point to elevated yields persisting. However, not all are convinced that a downturn in stocks is inevitable. Ameriprise Financial's chief market strategist, Anthony Saglimbene, believes the fundamentals of stocks and the economy remain robust and that investors should remain invested through the seasonal fluctuations rather than trying to time the market.

The upcoming jobs data, specifically the Labor Department's JOLTS report, is expected to play a significant role in the session. Investors will be looking for insights into the health of the labor market, especially with Federal Reserve Chair Kevin Warsh emphasizing the central bank's primary focus on taming inflation. A payrolls report close to expectations would reinforce the notion that future policy shifts will largely depend on the trajectory of price pressures rather than the rate of job growth.

Certain stocks were also affected early in the trading day. Nvidia, Intel, and AMD saw declines of 1.2% to 1.9% each. Robinhood, however, saw a boost with a 2.5% increase after Morgan Stanley upgraded the stock. Hut 8, a digital infrastructure firm, also rose by 1.82% following reports of a potential data center development in a cloud deal between Anthropic and Lambda.

Energy stocks, on the other hand, experienced gains as Brent crude prices increased by 1.67%, with Exxon Mobil and Devon Energy rising by 1% and 1.3% respectively.