US Stock Futures Rise as Oil Prices and Treasury Yields Decline: Dow Jones, S&P, Nasdaq, Wall Street
US stock index futures pointed to a sharply higher opening on Thursday as crude oil prices and Treasury yields retreated, following a late-session sell-off on Wall Street after the Federal Reserve’s latest interest-rate increase.
The anticipated rebound follows a difficult Wednesday session in which the Dow Jones Industrial Average closed at a three-month low and the S&P 500 recorded its lowest closing level in more than a month.
Investors were assessing lower energy prices and bond yields alongside the prospect of further monetary tightening by the Federal Reserve.
US Crude Falls Below $100 a Barrel
US crude oil futures dropped 2.5% on Thursday, falling below $100 a barrel and extending the previous session’s decline of more than 3%.
The retreat followed reports of measures taken by Saudi Arabia to limit supply disruptions after the closure of its key East-West pipeline.
Lower oil prices helped ease some concerns about energy-driven inflation, providing a more supportive backdrop for equity futures.
US Treasury yields also declined, with the benchmark 10-year yield falling after finishing Wednesday’s session broadly unchanged.
The simultaneous retreat in crude prices and bond yields contributed to the improved tone in pre-market trading.
Dow Closes at Three-Month Low After Late Sell-Off
US equities initially advanced on Wednesday as investors bought shares following declines in the preceding two sessions.
However, the major indices reversed course late in the day after the Federal Reserve announced its monetary policy decision and Chair Kevin Warsh addressed reporters.
The Dow Jones Industrial Average fell 631.21 points, or 1.2%, to 51,461.90, its lowest closing level in three months.
The S&P 500 declined 33.92 points, or 0.5%, to 7,551.81, marking its lowest close in more than a month.
The Nasdaq Composite recorded a smaller loss, slipping 3.15 points, or less than 0.1%, to 25,978.42.
All three indices finished in negative territory after surrendering their earlier gains.
Federal Reserve Raises Rates to 3.75%–4%
The Federal Reserve increased its benchmark interest-rate target by 25 basis points to a range of 3.75%–4%, marking its first rate increase since July 2023.
The central bank said inflation remained elevated and that the increase was intended to support a more timely return to its 2% inflation objective.
Updated economic projections indicated that a majority of Fed officials expected interest rates to exceed 4% by the end of 2026, implying at least one additional increase during the year.
Selling pressure intensified during Warsh’s post-meeting press conference as he emphasised the persistence of inflation.
“Our predominant focus is on the price stability side of our mandate. The plain fact is that inflation is too high, and has been for too long,” Warsh said.
“This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”
The remarks reinforced expectations that monetary policy could remain restrictive despite the recent decline in oil prices.
Energy Services and Banking Shares Lead Declines
Energy-related stocks weakened alongside crude oil prices during Wednesday’s session.
The Philadelphia Oil Service Index fell 3.1%, reaching its lowest intraday level in more than a month.
Banking stocks also recorded substantial losses, with the KBW Bank Index declining 2.9% to a two-month closing low.
Brokerage, housing and gold-related shares came under pressure late in the session, contributing to the broader market reversal.
Thursday’s futures gains indicated the possibility of an early rebound, although the direction of trading remained subject to developments in energy markets, Treasury yields and expectations for Federal Reserve policy.
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