US stock futures turned lower on Wednesday as rising Treasury yields and a rebound in oil prices challenged a market that had just pushed the S&P 500 and Nasdaq to record highs.
Dow futures fell 305 points 0.58%, S&P 500 futures slipped 0.33% and Nasdaq 100 futures lost 0.70%.
The 30-year Treasury yield touched 5.70%, its highest since 2002, while Brent moved back above $101 a barrel.
Investors are now waiting for the Federal Reserve’s September meeting minutes at 2 pm ET, with October hold odds high but another December hike still largely priced in.
5 things to know before Wall Street opens
1. Treasury yields are back at the centre of the trade
The 30-year Treasury yield briefly climbed above 5.70%, while the 10-year moved around 5.32%.
A $39 billion 10-year note auction later Wednesday will test demand after one of the sharpest bond selloffs in years. A weak auction could push yields higher and make record equity valuations harder to defend.
ING FX strategist Francesco Pesole said that investors are looking for clearer guidance on which inflation signals would be strong enough to trigger further Fed tightening.
2. Fed minutes could reshape the October-versus-December debate
The Federal Reserve releases minutes from its September 15-16 meeting at 2 pm ET. Markets currently see about a 78% chance that rates stay unchanged in October, but another increase by December remains largely priced in.
The minutes matter because investors want to know how broad support was for September’s increase and whether policymakers viewed it as an isolated move or part of a longer tightening cycle.
3. Oil above $101 brings inflation risk back into focus
Brent traded above $101 while WTI climbed towards $90 as a Gulf of Mexico storm and renewed Houthi attacks on Saudi Arabia raised supply concerns.
Operators had already shut about 9.2% of US Gulf offshore oil production as the storm approached.
For equities, the uncomfortable combination is $100-plus crude and 5%-plus Treasury yields. Higher energy costs threaten to keep inflation sticky just as investors are betting the Fed can pause.
4. SpaceX falls as its $40 billion Nvidia financing plan raises questions
SpaceX dropped about 2% before the bell after the Financial Times reported it is seeking roughly $40 billion to fund Nvidia chip purchases.
The proposed financing includes about $10 billion in bank loans and $30 billion in investment-grade debt, with Apollo expected to lead the package.
Intel moved the other way, gaining about 1.3% after CEO Lip-Bu Tan clarified that the chipmaker would remain involved in the Terafab project, easing fears that TSMC would displace it.
5. Constellation Brands slides as investors focus on demand, not the beat
Constellation Brands fell about 4.5% despite beating quarterly earnings and sales expectations.
Analysts highlighted a 0.6% decline in beer depletions, a cleaner measure of underlying demand, which overshadowed stronger shipment-driven sales.
Applied Digital and Levi Strauss report after the close. UBS analyst Ryan Gravett told Kiplinger that Applied Digital has built a valuable AI-infrastructure footprint, making its results another test of whether investors are still willing to pay for aggressive data-centre expansion.
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