Wall St futures slip as yields and oil rebound; Fed minutes in focus

On Wednesday, Wall Street futures dipped as Treasury yields and oil prices surged, leaving investors wary as they awaited the minutes of the Federal Reserve's September meeting. The tech-heavy Nasdaq and benchmark S&P 500 had previously reached all-time highs on Tuesday, buoyed by AI optimism and strong third-quarter earnings expectations.

Dow Jones Industrial Average was about 5% below its August 5 record closing high. However, caution prevailed as investors reevaluated interest rates and energy costs. Brent crude rose back above $100-a-barrel due to Middle East supply concerns, while the yield on 30-year Treasury bonds surged to its highest level since 2002. The probability of the Fed holding interest rates steady this month stood at 78%, according to CME Group's FedWatch tool, with a December rate hike still largely expected.

Chip stocks declined in premarket trading, with Micron Technology and Marvell Technology falling 2.2% and 1.2%, respectively. SpaceX shares dropped 2.1% following a report that the rockets-to-AI firm was seeking $40 billion in financing for Nvidia chip purchases. Intel rose 1.3% after Bloomberg News reported the company would continue working on Elon Musk's Terafab chipmaking venture.

Dow E-minis fell 178 points (0.34%) at 6:02 a.m. ET, while S&P 500 E-minis dropped 11.25 points (0.14%). Nasdaq 100 E-minis lost 129.25 points (0.41%). The third-quarter earnings season began the following week, with analysts forecasting a 30.6% S&P 500 earnings growth, primarily driven by a 114.7% surge in energy earnings and a 66.5% increase in tech results.

Despite the 30% earnings growth being smaller than the 54% jump in Q2, investors anticipated a largely positive season to support record-high stock markets. Notably, Constellation Brands declined 4.5% after Corona lowered its annual operating margin forecast.