Wall Street futures slide as rising oil, yields dampen mood
Traders widely expect the Federal Reserve to hold rates steady at its October meeting, but a December hike remains on the cards.
US stock index futures experienced a decline on Thursday, driven by inflation concerns as oil prices surged by nearly 4% and Treasury yields rose. The Dow E-minis fell 0.78%, the S&P 500 E-minis lost 0.4%, and the Nasdaq 100 E-minis shed 0.57%. Despite Samsung Electronics' forecast of a record quarterly profit, the company's shares closed slightly lower.
Notably, chipmakers faced renewed scrutiny, with Nvidia, Broadcom, and Micron Technology all declining between 0.6% and 1.4%. Worries about the AI boom and the potential for massive debt issuance by technology companies added to the market's apprehension. Broadcom, in particular, was reportedly seeking $50 billion in financing for OpenAI, raising concerns about the competition for capital.
The weak sentiment persisted on Thursday, with Brent crude prices jumping over 4% due to attacks on shipping in the Gulf and the Strait of Hormuz, while the US reduced offshore production amid a hurricane threat. Fed Governor Christopher Waller hinted at a possible pause at the central bank's next meeting, suggesting that additional rate hikes might be needed to bring inflation down to the 2% target.
However, the pace of increases remains flexible. Traders expect the Fed to hold rates steady at its October meeting, with a potential December hike on the cards. Notably, Wolfspeed saw a significant gain of 16.6% after securing a $1.5 billion conditional loan commitment from the US defence department to boost domestic production of silicon carbide materials and power devices, while Applied Digital rose 3.5% after its first-quarter revenue more than quadrupled.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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