- US stock futures indicate a weaker opening due to rising oil prices and bond yields
- Dow Jones and S&P 500 futures fell 0.5%, Nasdaq-100 futures declined nearly 1%
- Tech stocks Nvidia, AMD, Microsoft, and Alphabet slipped in pre-market trading
US stock futures pointed to a weaker opening on Tuesday, as rising oil prices, higher global bond yields and renewed US-Iran tensions weighed on investor sentiment. Dow Jones Industrial Average futures fell 240 points, or 0.5%, while S&P 500 futures declined 0.5%. Nasdaq-100 futures underperformed, slipping nearly 1%, signalling pressure on technology stocks at the start of the new month.
The weakness comes as investors assess whether elevated energy prices could keep inflationary pressures high and complicate the Federal Reserve's monetary policy outlook.
The weakness in futures was reflected across major technology stocks. Nvidia, AMD and Micron were all down more than 1% in pre-market trading. Microsoft fell 1%, while Google-parent Alphabet slipped 0.6%.
The decline comes after a strong August for US technology stocks, with AI-linked companies among the market's leading performers. September has historically been a challenging month for equities, adding another reason for investors to remain cautious as the new month begins.
Here are three key factors weighing on Wall Street futures:
1. Inflation Worries, Rising Bond Yields
Global bond yields continued to climb, raising concerns that persistent inflation could limit the Federal Reserve's ability to ease monetary policy later this month. The yield on the US 10-year Treasury note climbed to levels not seen since January 2025. Japan's 10-year government bond yield reached its highest level since August 1996, while Germany's benchmark yield rose to its highest level since 2011.
Investors are increasingly concerned that higher oil prices could feed into inflation, keeping central banks cautious on interest-rate cuts. The rise in yields is particularly significant for growth and technology stocks, whose valuations are more sensitive to changes in borrowing costs and discount rates.
2. Oil Prices Surge
Crude oil prices added to inflation concerns, with US oil prices rising more than 2% to $87.81 a barrel. Brent crude futures gained 1.8% to $92.15. The sharp increase in energy prices comes as investors monitor developments in the Middle East and the potential impact on global supply and shipping routes.
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A sustained rise in crude prices could put additional pressure on inflation expectations and, in turn, influence the Federal Reserve's interest-rate decisions.
3. US-Iran Tensions Escalate
Geopolitical tensions also weighed on market sentiment after US President Donald Trump on Monday threatened additional strikes on Iran. The comments followed direct attacks between the US and Iran on Sunday, marking an escalation in a conflict that had recently shifted towards an economic stand-off.
Concerns intensified after a tanker was struck by three unknown projectiles while transiting the Strait of Hormuz on Monday. The UK Maritime Trade Operations agency said the tanker was sailing in the southern shipping lane near the Omani coast. No casualties were reported.
Any further escalation around the Strait of Hormuz could create additional uncertainty for global oil supplies and shipping, potentially keeping energy prices elevated.
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