U.S. stock futures declined on Wednesday as Treasury yields and oil prices advanced, pulling back from the record-setting closes recently achieved by the Nasdaq and S&P 500. Market participants monitored corporate updates, the upcoming earnings reporting season, and the impending release of the Federal Reserve’s September meeting minutes.
U.S. Stock Futures Extend Losses After Record Closes
Pre-market trading data at 6:02 a.m. ET showed Dow futures down 178 points, or 0.34%. S&P 500 futures slipped 11.25 points, or 0.14%, while Nasdaq 100 futures dropped 129.25 points, or 0.41%.
As the morning progressed, declines accelerated, with technology stocks pacing the pullback. The Nasdaq was on track for an opening drop of roughly 0.6%.
In the previous session, the S&P 500 advanced 0.58% to finish above 7,800 for the first time ever. The Nasdaq Composite similarly climbed 0.45% to a fresh record. Meanwhile, the Dow remained roughly 5% shy of its August 5 closing high.
Oil and Treasury Yields Rise Again
Traders weighed ongoing Middle East supply concerns as Brent crude hovered near USD 102 a barrel. U.S. benchmark West Texas Intermediate tracked toward USD 90. Attention remained focused on shipping lanes and energy infrastructure following renewed attacks involving Saudi targets and Yemen’s Houthi rebels.
Treasury yields climbed back up after declining the day before. The 10-year benchmark yield rose approximately six basis points to 5.326%, and the 30-year yield moved near 5.706%, marking its highest level since 2002. Earlier in the week on Monday, the 10-year yield had breached 5.35%.
Additionally, the Treasury lined up a USD 39 billion auction of 10-year notes for Wednesday. This followed a three-year note sale on Tuesday, with a USD 22 billion 30-year bond offering planned for Thursday.
Fed Minutes Lead Wednesday’s Calendar
At 2 p.m. ET, the Federal Reserve will publish the minutes from its September meeting. During that gathering, policymakers implemented an interest rate hike, representing the central bank’s initial increase since 2023. Investors will parse the document for deeper insights into debates surrounding employment and inflation.
According to CME FedWatch figures, traders priced in a 78% likelihood that rates would remain unchanged at the October meeting, leaving a 22% chance of another hike. A December rate increase remained largely priced into the markets, though those expectations remain subject to incoming economic data.
Alongside the central bank minutes, investors braced for corporate results. Applied Digital and Levi Strauss are slated to report earnings following Wednesday’s closing bell. A slate of major financial institutions will report next Tuesday as the third-quarter earnings season picks up speed.
Chip Shares Retreat as Company News Drives Trading
Before the opening bell, Micron Technology dropped 2.2% and Marvell Technology fell 1.2%. Other semiconductor equities also retreated after bolstering major indexes during Tuesday’s trading.
SpaceX shares dipped 2.1% in the wake of reports that the company sought USD 40 billion to finance Nvidia chip purchases. Conversely, Intel shares rose 1.3% following reports indicating the company will continue its involvement in Elon Musk’s Terafab chipmaking initiative.
Constellation Brands slid 4.5% after cutting its full-year operating margin outlook. Digital asset-linked stocks also dropped as Bitcoin retreated toward USD 83,700 from overnight levels near USD 85,700. Concurrently, the dollar index gained 0.5% and gold futures fell about 1.1%.
Earnings Expectations Remain Strong as Overseas Markets Fall
LSEG figures indicate that analysts anticipate S&P 500 firms to deliver combined third-quarter earnings growth of 30.6%. Projections point to 114.7% growth for the energy sector and 66.5% for technology, compared to a 54% overall earnings increase in the second quarter.
Even so, recent market gains have concentrated within a smaller group of equities. UBS strategist Ulrike Hoffmann-Burchardi cautioned that “The breadth of the rally has narrowed.” Data from Citadel Research indicated that only 25% of S&P 500 companies traded above their 50-day moving averages as of the close of the prior quarter.
International markets finished lower, with Japan’s Nikkei losing 0.92% and South Korea’s Kospi dropping nearly 2%. European equities also retreated, with France’s CAC 40 down about 1% and Germany’s DAX slipping roughly 1.3%. Exchanges across mainland China stayed closed for the Golden Week holiday.
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