US stock futures fell on Tuesday as oil prices surged towards $100 a barrel, reviving inflation concerns before a crucial run of US price data later this week.
Dow futures dropped over 400 points or 0.7%, S&P 500 contracts lost 0.2% and Nasdaq 100 futures slipped around 0.1% in early trading.
Brent climbed above $99 after attacks on Saudi energy facilities intensified fears of a wider Middle East supply shock.
Treasury yields also edged higher, adding pressure on equities.
Investors now face Thursday’s producer-price report and Friday’s CPI release before the Federal Reserve decides on interest rates next week at its September meeting.
5 things to know before Wall Street opens
1. Oil is back near $100
Brent rose above $99 a barrel and WTI climbed above $94 after Houthi attacks damaged Saudi energy infrastructure.
The move has revived fears that the conflict could disrupt more Gulf supply just as inflation remains above the Fed’s target.
Deutsche Bank strategist Jim Reid said in comments reported by MarketWatch that the latest Middle East escalation had added to the oil rally and broader market unease.
The 10-year Treasury yield moved towards 4.81%, showing how quickly higher crude is feeding back into rate-sensitive assets.
2. Inflation data now matter more than payrolls
The next major test comes from the August producer price index on Thursday and consumer price index on Friday, both due at 8:30 am ET.
The economists expect headline CPI to remain around 3.4% year on year, while core inflation may ease to 2.4%.
A softer reading would support the case for keeping rates unchanged. A surprise on the upside could push bond yields higher and deepen pressure on equities.
3. A September Fed hike remains a live risk
Markets are assigning roughly a 60% probability to a rate increase at the September 15-16 meeting.
Those odds climbed after August payrolls rose by 162,000, well above forecasts, and July employment was revised higher.
The strong labour report reduced concerns about an imminent slowdown and gave policymakers more room to focus on inflation.
For investors, the question is whether this week’s price data confirm that the economy can absorb another increase in borrowing costs.
4. The Dow has an extra drag from Amgen
The Dow’s sharper decline is not only about oil. Amgen fell more than 5% before the bell after Novartis said its late-stage pelacarsen trial failed to meet its primary cardiovascular endpoint.
Analysts noted that Amgen’s high share price gives it an outsized influence on the price-weighted Dow.
Energy names moved the other way, with Marathon Petroleum and Occidental Petroleum gaining as crude prices climbed.
5. Chips rise while crypto-linked stocks retreat
Technology remains comparatively resilient. Intel gained about 2.5%, AMD rose more than 1% and Nvidia edged higher in premarket trading as optimism around AI spending continued to support chipmakers.
Crypto-linked stocks moved in the opposite direction as bitcoin slipped below $78,500. Coinbase and Strategy both fell before the bell.
The split suggests investors are still willing to back selected growth themes, but Tuesday’s broader direction will remain tied to oil, yields and the inflation outlook.
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