US stock futures traded lower before the opening bell on Tuesday, September 15 amid soaring oil prices and growing concerns over interest-rate hike by the Federal Reserve.
The US stock market is expected to drop today as Dow Jones futures declined 0.48% to 52,189, Nasdaq fell 0.38% to 29,041, while S&P traded 0.35% lower at 7,598 by 5:19 am ET or 3:59 pm IST. Stock futures were down on the backdrop of several global cues, including rally in oil prices and US treasury yields.
Here are three reasons why US stock market is expected trade lower today -
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Oil Nears $107 A Barrel
Oil prices edged higher on Tuesday as traders weighed the risk of further disruptions to Middle East supplies after a key Saudi Arabian pipeline was forced offline. Brent crude rose to around $107 a barrel, while West Texas Intermediate was near $103. The gains came after the market absorbed the impact of attacks that shut Saudi Arabia's East-West pipeline, a critical alternative route for moving crude without using the Strait of Hormuz.
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Treasury Yields Rise
US 10-year Treasury yield surged to the highest in nearly two decades, primarily driven by rising energy price and inflation concerns.
The yields climb as much as five basis points to 5.04%, crossing a peak from 2023 and hit the highest since 2007. The latest jump comes as oil prices rose amid Middle East supply concerns.
US Federal Reserve Decision
Investors are also focused on Federal Reserve's Decision on Wednesday, expect officials to raise short-term borrowing costs for the first time since July 2023. According to CME, there is around 92% possibility that the central bank could hike interest rates by a quarter point from the current range of 3.5% to 3.75%.
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