US Stock Futures Rise as Oil Prices Retreat Ahead of Federal Reserve Decision: Dow Jones, S&P, Nasdaq, Wall Street
US stock index futures pointed to a higher opening on Wednesday as crude oil prices declined and investors awaited the Federal Reserve’s interest rate decision later in the day.
The indicated rebound followed two consecutive sessions of losses that pushed the S&P 500 to its lowest closing level in more than a month.
US crude oil futures fell nearly 2% after gaining almost 6% over the previous two days. The decline followed an American Petroleum Institute report showing an unexpected increase of 7.1 million barrels in US crude oil inventories last week.
Trading activity could remain limited ahead of the Federal Reserve’s monetary policy announcement.
According to CME Group’s FedWatch Tool, market pricing indicated a 92.7% probability of a 25-basis-point interest rate increase. The figure reflects market-implied expectations rather than a confirmed policy decision.
Wall Street Extends Losses on Tuesday
US equities declined on Tuesday, extending the previous session’s losses as Treasury yields increased and oil prices rose.
The Dow Jones Industrial Average fell 328.09 points, or 0.6%, to 52,093.11.
The Nasdaq Composite declined 204.84 points, or 0.8%, to 25,981.57, while the S&P 500 lost 34.25 points, or 0.5%, to close at 7,585.73.
All three indices finished above their intraday lows but remained in negative territory.
The S&P 500 recorded its lowest closing level in more than a month.
Treasury Yields Rise Amid Inflation and Interest Rate Concerns
US Treasury yields increased during Tuesday’s session, with the benchmark 10-year yield reaching its highest intraday level since July 2007.
The move came as investors assessed inflation risks and the outlook for interest rates ahead of the Federal Reserve’s announcement.
Dan Coatsworth, head of markets at AJ Bell, discussed the implications of Treasury yields reaching 5% for equity valuations.
“Market commentators have long argued that Treasuries hitting 5% is the trigger for an equity market correction,” Coatsworth said. “At this level, investors might wonder what’s the point in holding risky equities when they can get 5% on low-risk government bonds.”
He added: “It is a psychological level and can sometimes act as a warning sign for a market correction rather than be a guaranteed tipping point for equities to slump.”
His comments reflect an assessment of investor behaviour rather than a prediction that a market correction will necessarily occur.
Oil Prices Decline Following Inventory Report
Crude oil prices retreated on Wednesday after the American Petroleum Institute reported that US inventories had increased by 7.1 million barrels in the previous week.
The decline followed two days of gains totalling almost 6%.
During Tuesday’s session, US crude oil futures rose more than 4% amid concerns about supply disruptions following reports of further Houthi strikes on Saudi Arabia.
The subsequent inventory data provided a different influence on prices ahead of the Federal Reserve’s decision.
Retail and Airline Stocks Lead Tuesday’s Declines
Several sectors recorded losses during Tuesday’s session.
The Dow Jones US Retail Index fell 2%, reaching its lowest closing level in well over a month.
Airline stocks also declined as higher crude oil prices increased attention on fuel costs. The NYSE Arca Airline Index lost 1.9%.
Software, brokerage and utility stocks registered declines, while energy shares advanced alongside crude oil prices.
Wednesday’s indicated recovery in index futures followed the pullback in oil prices, although the Federal Reserve’s forthcoming decision remained a central focus for investors.
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