US stock futures were in red before the opening bell on Wednesday, September 2 amid escalating tensions between US and Iran, higher oil prices and possibility of September interest-rate hike by the Federal Reserve.
Nasdaq 100 declined 0.59% to $28,954.7, S&P 500 fell 0.41% to $7,721.75, while Dow Jones Industrial Average slipped 0.14% to $52,752 by 4:42 am ET or 3:12 pm IST.
Stock futures were down on the backdrop of several global cues, including US Iran tensions and surge in Treasury yields.
Here are three reasons why stock futures are trading lower today -
US-Iran Tensions, Rally In Oil Prices
The US carried out its second round of attacks against the Islamic Republic in three days, following reported attacks by the IRGC on commercial shipping in the Strait of Hormuz and US military. in the region. Additionally, shipping risks heighetned after a tanker was hit by three unidentified projectiles while transiting the Strait of Hormuz on Monday, reports said.
Brent crude crossed $95 a barrel mark as tensions US and Iran escalated. The latestadvance comes a day after Brent jumped around 4.5% to $94.52 a barrel and WTI climbed nearly 5% to $90.03, as the US carried out fresh strikes against Iranian targets.
Rate Hike Risk
The rally in oil prices has raised worries about continuing inflation, raising the possibility if interest rate hike by central banks. Traders estimate the chances of rate hike this month at more than 50% for three major central banks, including around 70% for the Fed, according to data collected by Bloomberg.
Bond Yields Surge
US bond yields extended gains, with the 10-year Treasury yield jumping to 4.81%, while the 30-year Treasury
yield rose to 5.28%. This comes as global bond yields continue to surge amid renewed Middle East tensions continue to concern investors.
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