Oct 7 (Reuters) – Wall Street futures edged lower on Wednesday as Treasury yields and oil prices rose again, keeping investors cautious as they awaited the minutes of the Federal Reserve’s September meeting.
The tech-heavy Nasdaq and the benchmark S&P 500 ended at all-time highs on Tuesday as AI optimism propelled tech stocks higher and investors braced for a solid third-quarter earnings season.
The blue-chip Dow remains about 5% below its August 5 record closing high.
On Wednesday, however, sentiment turned more cautious as investors reassessed the outlook for interest rates and energy costs. Brent crude was back above the psychologically important $100-a-barrel level as Middle East supply concerns persisted. [O/R]
The yield on 30-year Treasury bonds rose to the highest since 2002, up 5.70% ahead of the release later in the day of minutes from the US Federal Reserve’s September policy meeting, when policymakers raised interest rates to combat inflation.
Traders now see a 78% chance of the US central bank holding interest rates steady this month, though a December rate hike remains largely priced in, according to the CME Group’s FedWatch tool.
Chip stocks were lower in premarket trading, with Micron Technology and Marvell Technology down 2.2% and 1.2%, respectively.
SpaceX shares fell 2.1% after a Financial Times report that the rockets-to-AI firm was seeking $40 billion in financing to fund purchases of Nvidia chips.
Intel rose 1.3% after a Bloomberg News report said the chipmaker would continue to work on Elon Musk’s Terafab chipmaking venture.
At 6:02 a.m. ET, Dow E-minis were down 178 points, or 0.34%, and S&P 500 E-minis were down 11.25 points, or 0.14%. Nasdaq 100 E-minis were down 129.25 points, or 0.41%.
The third-quarter earnings season kicks off next week, with a number of high-profile financial firms expected to report on Tuesday.
Analysts currently expect S&P 500 earnings growth of 30.6%, in aggregate, for the July-to-September period, led by an expected 114.7% jump in energy earnings, followed by a 66.5% estimated surge in tech results, according to LSEG.
While the 30% profit growth is smaller than in the second quarter, when S&P 500 companies posted a 54% jump in earnings, investors expect a largely positive season to underpin record-high stock markets.
Among other movers, Constellation Brands fell 4.5% after the Corona beer maker lowered its annual operating margin forecast.
(Reporting by Tharuniyaa Lakshmi in Bengaluru; Editing by Maju Samuel)
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