US stock futures were trading lower before the opening bell on Thursday, October 8 as both Treasury yields and oil prices continue to rally.
Dow Jones Industrial Average futures dropped 0.94% to 50,966, Nasdaq declined 0.80% to 31,152.25, while S&P 500 traded 0.54% lower at 7,810.25 by 5 pm IST.
Stock futures on Thursday slipped on backdrop of several global cues, indicating a red start for Wall Street today.
Here are three reasons why US stock futures are sliding
Treasury Yields Rise
The benchmark 10-year Treasury yield climbed 7 basis points to 5.35%, highest since 2002. The 30-year Treasury bond yield stood around 5.72%, near 24-year highs.This comes after Federal Reserve Governor Christopher Waller said more rate hikes may be required to manage inflation concerns.
Oil Price Jumps
Brent crude oil prices climbed above $104 a barrel on Thursday, October 8 following reports of potential US military action against Iran revived fears of further disruption to Middle East oil supplies. Brent crude prices were last trading at $104.5 a barrel, up 4.5%, after settling at $100.20 in the previous session. The latest rally came after reports said that the Trump administration has directedthe Pentagon to develop strike options against Iran that could be carried out before the US midterm elections.
Federal Reserve's Rate Hike Bet
Fed Governor Christopher Waller said more rate hikes will likely be required to slow inflation, while there is some flexibility on timing.
“If the economic data continue to come in as expected, I anticipate additional hikes to support a timelier return of inflation to our 2% goal,” Waller said Thursday in Istanbul. “The hikes do not need to come at consecutive meetings, but they should be in place in an acceptable period of time.”
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