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U.S. stock futures edged lower on Wednesday, October 7, as Treasury yields and oil prices rose, leaving investors to weigh renewed inflation concerns against the Federal Reserve’s upcoming account of its September policy meeting. The Fed minutes were scheduled for release later in the day and could offer detail on the discussions behind the central bank’s decision to raise its benchmark interest rate.
The pullback came after the Nasdaq and S&P 500 closed at record highs on Tuesday, supported by enthusiasm for artificial-intelligence-related stocks and expectations for another strong corporate earnings season. Wednesday’s early trading suggested a more cautious start: Dow futures fell 0.34%, S&P 500 futures slipped 0.14%, and Nasdaq 100 futures declined 0.41% at 6:02 a.m. Eastern time, according to Reuters.
Oil and long-term yields rise
Brent crude returned above $100 a barrel as concerns about Middle East supply persisted. The Associated Press reported Brent at $101.88, up 1.3%, and U.S. benchmark crude at $89.99, up 0.6%, in early trading. The rebound followed a slight retreat in oil prices earlier in the week.
Higher energy prices matter to investors because they can feed into inflation and complicate the outlook for interest rates. Treasury yields also resumed climbing: the 10-year yield reached 5.33%, while the 30-year rose to 5.71%, according to the AP. Reuters put the 30-year yield at 5.70% and described it as its highest level since 2002.
The rise in longer-term borrowing costs can affect valuations across the stock market, including technology companies whose expected profits are often valued over many years. The AP noted that investors have been watching the cost of borrowing amid questions about how much of recent market optimism rests on companies’ spending in the AI race.
Fed minutes due after September rate decision
The Federal Reserve was due to release minutes from its September 15–16 meeting on Wednesday. The central bank raised its benchmark rate at that meeting, according to Reuters and the AP. The minutes are a record of policymakers’ discussion, rather than a new rate decision, and investors were waiting to see what they might reveal about officials’ assessment of inflation and the policy path ahead.
Market pricing indicated a 78% chance that the Fed would hold rates steady at its October meeting, Reuters reported, citing CME Group’s FedWatch tool. A rate increase in December remained largely priced in. Those probabilities describe futures-market expectations, not a commitment by the central bank.
Record closes meet a cautious premarket
The Nasdaq and S&P 500 reached all-time closing highs on Tuesday, as technology shares benefited from AI optimism. The Dow Jones Industrial Average remained about 5% below its August 5 record closing high, Reuters reported. Wednesday’s retreat in futures came as investors reassessed the combination of energy costs, bond yields and the Fed’s policy outlook.
Several chipmakers were weaker before the opening bell. Reuters reported Micron down 2.2% and Marvell Technology down 1.2%; the AP separately noted declines among technology stocks, including Micron and Advanced Micro Devices. These were premarket moves, not closing prices.
Earnings season approaches
Investors were also looking ahead to third-quarter results, with major financial companies expected to begin reporting the following week. LSEG data cited by Reuters showed analysts expected aggregate S&P 500 earnings growth of 30.6% for the July-to-September quarter, including estimated growth of 114.7% for energy companies and 66.5% for technology companies.
That projected growth would be slower than the 54% increase reported for S&P 500 earnings in the second quarter, Reuters said. The AP cited FactSet estimates of nearly 30% year-over-year earnings-per-share growth and reported that PepsiCo was due to report Thursday, followed by Delta Air Lines on Friday. The early futures figures and forecasts reflect the information available before Wednesday’s U.S. market open; the day’s subsequent trading response was not yet known in the reports.
