Stock market today: Dow, S&P 500, Nasdaq futures muted as oil falls, markets eye looming Trump-Xi meeting

On Wednesday, stocks experienced a decline as Treasury yields rose due to concerns about inflation. The Dow Jones Industrial Average fell 0.7%, the S&P 500 dropped 0.8%, and the Nasdaq Composite fell 1.1%. The 10-year Treasury yield surged above 5.11%, its highest level since 2007, as oil prices increased and business activity expanded beyond expectations.

The drop in stocks was largely attributed to uncertainty surrounding potential US-Iran relations. President Trump announced on Tuesday that US and Iranian officials met for several hours at the UN Assembly in New York, sparking hopes of a truce between the two nations. However, Brent crude oil futures traded at $98 per barrel, while WTI crude futures hit $92, indicating a higher price for global benchmark oil.

These events heightened speculation about the Federal Reserve potentially raising interest rates more than once this year. Federal Reserve Governor Michael Barr even called for further policy adjustments to combat inflation. The upcoming meeting between President Trump and Chinese President Xi Jinping at Joint Base Andrews is expected to discuss various issues, including trade, the war in Iran, rare earths, and artificial intelligence.

While major policy breakthroughs are not anticipated, developments in AI policy are expected to be of particular interest to tech investors. Notable Silicon Valley executives, such as Jensen Huang from Nvidia, Sam Altman from OpenAI, and Sundar Pichai from Google, will attend a dinner with the presidents on Thursday.