US stock futures were mixed on Wednesday as investors weighed softer expectations for a near-term Federal Reserve rate hike against key inflation data due later in the day.
At the latest reading, Dow Jones futures fell 0.16% to 51,621, while S&P 500 futures slipped 0.09% to 7,724.75. Nasdaq 100 futures declined 0.26% to 30,534.50.
The moves come after US equities closed lower for a second straight session on Tuesday, with rising Treasury yields continuing to weigh on risk appetite.
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Here are the three key factors likely to shape Wall Street trade today:
1. Fed rate-hike bets ease
Investors are reassessing expectations for the Fed's next rate move after New York Fed President John Williams indicated that policymakers could afford to wait before raising rates again.
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Market pricing for an October rate hike has eased sharply from levels seen last week. Investors are now looking to the August Personal Consumption Expenditures (PCE) inflation report, due at 8:30 a.m. ET, for fresh clues on the central bank's policy path.
Economists expect headline PCE inflation to rise 3.7% year-on-year in August, unchanged from July, according to the data cited in the market report.
2. Treasury yields pull back from recent highs
Treasury yields eased on Wednesday after climbing to multi-year highs in the previous session.
The 10-year Treasury yield was just below 5.23%, down around two basis points from Tuesday's close. It had earlier crossed 5.29%, its highest level since 2007.
The 30-year Treasury yield stood around 5.55%-5.6%, after reaching its highest level since 2002.
Lower yields can provide some relief to equities by reducing pressure on borrowing costs and valuations, although investors remain sensitive to any renewed rise in yields.
3. Oil prices and inflation remain in focus
Crude prices remained volatile as traders assessed developments around Middle East supply and the outlook for a recovery in oil exports.
Brent crude was recently around $101.87 a barrel, while West Texas Intermediate crude traded near $90.35 in the latest market readings cited.
Earlier, oil prices had fallen sharply, with Brent declining 2.7% to $96.56 and WTI dropping 4.8% to $89.70 on Tuesday in one of the cited market snapshots.
Lower oil prices could ease concerns about inflation, while a sustained rise in crude could complicate the Fed's efforts to bring inflation back towards its target.
Among individual stocks, Cal-Maine Foods fell around 6.5% after its earnings report. Conagra Brands, Jabil and FactSet Research Systems were due to report results before the opening bell, while Micron Technology was scheduled to release earnings after the market close.
Boeing shares rose around 3% after the company was awarded a multi-billion-dollar contract to build fighter jets for the US Navy.
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Robinhood Markets gained around 2% after announcing new active-trading products, including Robinhood Agents, which the company said can analyse markets, build strategies and trade on behalf of users.
AI-linked and semiconductor stocks were under pressure in premarket trading after a strong session on Tuesday. The Roundhill Memory ETF was down around 1%, while the iShares Semiconductor ETF slipped about 0.3%.
Among the so-called Magnificent Seven, Nvidia gained around 0.3%, while Meta Platforms slipped 0.4% and Apple was little changed.
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