Dow futures drop over 250 points as oil prices surge, Treasury yields hit highs
US stock futures fell on Tuesday, September 1, as rising bond yields and elevated oil prices renewed inflation concerns, putting pressure on investors ahead of the Federal Reserve’s next interest-rate decision.
Dow Jones Industrial Average futures fell over 250 points, or 0.5%, while S&P 500 futures slipped 0.5%. Nasdaq-100 futures declined nearly 1%, with technology stocks among the biggest early decliners.
Investors were also weighing renewed uncertainty around the conflict involving the US and Iran, along with the outlook for interest rates. Higher oil prices have added to concerns that a resurgence in inflation could complicate the Federal Reserve’s policy path later this month.
US stocks entered September after posting solid gains in August, with the major indexes carrying double-digit gains for the year. However, rising energy prices and higher bond yields have added to caution at the start of a month that has historically been one of the weaker periods for equities.
In an article titled “Why The Worst Month of the Year Likely Won’t Bring Rain,” Carson Group’s Ryan Detrick noted that September has historically been the weakest month for US stocks. The S&P 500 has declined an average of 0.6% during the month and has delivered a positive return only 45% of the time, according to Detrick. September, along with February, is the only month of the year with a historically negative average return.
Oil prices climb as West Asia tensions persist
Oil prices rose as renewed hostilities between the US and Iran continued to fuel concerns over global energy supplies.
US West Texas Intermediate crude futures gained more than 2% to $87.81 a barrel, while Brent crude, the global benchmark, rose 1.8% to $92.15.
The rise in crude prices has heightened concerns over a potential inflationary impact, particularly if elevated energy costs persist.
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Global bond yields surge
Bond yields climbed across major markets, adding another layer of pressure on equities.
The benchmark US 10-year Treasury yield rose 3 basis points to 4.788%, its highest level since January 2025.
Japan’s 10-year government bond yield jumped more than 6 basis points to 3%, reaching its highest level since August 1996. The country’s two-year government bond yield also touched 1.81%, its highest level in 31 years.
Germany’s benchmark 10-year yield also climbed to its highest level since 2011.
Higher yields can weigh on stocks by increasing borrowing costs and making bonds relatively more attractive compared with riskier assets.
Tech stocks under pressure
Technology shares were lower in premarket trading. Nvidia, AMD and Micron each fell more than 1%, while Microsoft declined about 1%. Alphabet, Google’s parent company, slipped 0.6%.
The moves come as investors assess whether higher energy prices and rising yields could challenge the equity market’s strong run this year.
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