Dow Jones futures fall 350 pts, US stocks set for weak open as crude tops $108, Treasury yield soar above 5%

Dow Jones futures fell nearly 350 points as surging crude oil prices and the US 10-year Treasury yield topping 5 percent weighed on US stocks ahead of the Federal Reserve’s rate decision.
Wall Street futures fall US stocks set to open lower on Tuesday.Oil prices surge, Treasury yields climb above 5%.AI concerns weigh on tech stocks like Alphabet.Did our AI summary help? Market MasteryWebinar by Vishal Malkan Find the weak linksin your portfolio by Vishal Malkan Register for FREE Webinar Register for FREE

US stocks were set to open lower on Tuesday, with Dow Jones futures falling nearly 350 points, amid a fresh surge in crude oil prices and the US 10-year Treasury yield climbing above 5 percent. Soaring oil prices and rising yields added to concerns over interest rates and the outlook for artificial intelligence demand.In the late afternoon (IST), Dow E-minis were down 341 points, or 0.65 percent, while S&P 500 E-minis fell 0.52 percent and Nasdaq 100 E-minis declined 0.58 percent.The weakness came as Brent crude jumped more than 2 percent to above $108 a barrel following fresh attacks on Saudi Arabian energy infrastructure, while Treasury yields climbed to levels not seen in nearly two decades. Investors were also preparing for a widely expected Federal Reserve rate increase on Wednesday.The benchmark 10-year US Treasury yield rose as high as 5.0328 percent, its highest since 2007, and was last up nearly 7 basis points at 5.0286 percent. Higher yields can weigh on equity valuations while increasing the relative appeal of risk-free government debt.Markets are now pricing in a 92 percent probability that the US Federal Reserve will raise interest rates on Wednesday, according to Reuters. Expectations for tighter monetary policy have strengthened after data last week showed US consumer prices accelerated in August, while a measure of underlying inflation recorded its biggest increase in four months.Investors will also be watching US Treasury Secretary Scott Bessent’s appearance before Congress. The Treasury has expanded debt buybacks in an effort to ease pressure in the bond market, but yields have continued to climb.Brent crude tops $108 after Saudi infrastructure attacksOil prices added to the pressure on equities as concerns over Middle East supplies intensified. Brent crude futures rose 2.37 percent to $108.18 a barrel, while West Texas Intermediate gained 2.43 percent to $103.85.The latest rise followed attacks on Saudi Arabian energy infrastructure that left the kingdom’s East-West pipeline offline, raising concerns that damage to infrastructure and transport routes could take longer to repair.  The prolonged Middle East conflict and elevated energy prices have added another inflationary risk just as markets brace for tighter US monetary policy.Alphabet, Microsoft fall as AI concerns persistTechnology stocks also remained under pressure after Monday’s selloff, with Alphabet and Microsoft down more than 1 percent each in premarket trading. Chipmakers traded in a relatively narrow range after bearing the brunt of the previous session’s decline, while Nvidia edged higher.The latest bout of weakness in technology shares followed calls from executives at leading AI companies to slow the development of artificial intelligence over safety concerns. Uncertainty over what such a slowdown could mean for AI investment and demand has added pressure to a sector that has been a major driver of equity-market gains.The broader risk-off mood extended beyond the US. MSCI’s main world stocks index fell 0.28 percent on Tuesday after dropping 0.65 percent in the previous session.Indian markets were also under pressure, with GIFT Nifty down 260 points, or 1.11 percent, at 23,183 in afternoon trade, reflecting the deterioration in global risk sentiment amid rising oil prices and bond yields.Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.