US stock futures slipped before the opening bell on Wednesday, October 7 after the S&P 500 hit a fresh all-time high as oil prices and Treasury yields climbed.
Nasdaq futures dropped 0.67% to 31,271.5, S&P 500 declined 0.32% to 7,849, while Dow Jones Industrial Average traded 0.56% lower at 51,524 by 5 pm IST.
On Tuesday, S&P 500 closed above 7,800 for the first time, driven by gains in chipmakers, while bond yields fell.
Stock futures on Wednesdsay dipped on backdrop of several global cues, indicating a red start for Wall Street today.
Here are three reasons why the US stock market is expected to trade lower today -
Oil Jumps
Brent crude oil prices rose above the $100-a-barrel mark on Wednesday, continuing gains from the previous session as persistent risks to Middle East energy flows outweighed signs of improving supply from the region. The renewed attacks by Iran on vessels in the Strait of Hormuz dampened optimism at a time when shipments through the waterway were approaching prewar levels, lifting Brent toward $102 a barrel.
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Treasury Yields Surge
US Treasury yields climbed, with the 30-year Treasury bond rising 5 basis points to 5.70%, highest since 2002 while the benchmark 10-year Treasury was up 6 basis points to 5.32%. this comes as bond sell-off continues over the past six weeks amid concerns of investors over inflation and elevated energy prices. Overseas too, bond sell-off continued, with the yield on the 10-year French bond climbed 12 basis points to trade at 4.87% and 10-year U.K. Gilt yield climbed 7 basis points to 5.44%.
Fed Minutes Ahead
Focus is also on minutes from the Federal Reserve's September meeting for indications on whether rate hikes will continue after September rate hike. Markets are especially looking at the possibilit for a rate hike in December. At present, market is estimating a 78% chance that the Fed will keep rates unchanged at its next meeting, according to the CME Group's FedWatch tool.
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