US stock futures moved lower on Tuesday, September 15, as investors prepared for the Federal Reserve’s two-day policy meeting. Rising Treasury yields and oil prices added pressure across Wall Street before the opening bell.
Dow Jones futures fell 341 points, or 0.65%, at 7:00 a.m. ET. S&P 500 futures declined 0.3%, while NASDAQ 100 futures dropped 0.58%. The market’s move followed losses in the previous session, when technology and semiconductor stocks came under selling pressure.
The benchmark 10-year US Treasury yield climbed above 5% and reached 5.0328%, its highest level since 2007. Bond prices fall when yields rise, and higher yields can increase borrowing costs across the economy.
The latest rise came as traders adjusted their expectations for US interest rates. Investors also continued to monitor inflation, federal borrowing and energy prices. US Treasury Secretary Scott Bessent was due to testify before the House Financial Services Committee on Tuesday as bond markets remained under pressure.
“If yields keep rising, then there's bound to be further spillover effects,” ANZ head of Asia research Khoon Goh said.
The Federal Reserve will begin its September meeting on Tuesday and announce its rate decision on Wednesday. Futures markets were pricing a 92% probability that policymakers would raise rates by 25 basis points.
A quarter-point increase would lift the federal funds target range from 3.5%-3.75% to 3.75%-4%. A Reuters poll also found that 86 of 101 economists expected the Fed to raise rates by 25 basis points, marking the first increase since July 2023.
Recent US data kept inflation concerns in focus. Consumer prices accelerated in August, while the labor market remained firm. Investors will therefore watch Fed Chair Kevin Warsh’s comments and the central bank’s updated rate projections for clues about future meetings.
Oil prices extended their gains as traders monitored supply routes in the Middle East. Brent crude futures rose more than 2% to USD 108.06 a barrel, while West Texas Intermediate crude traded at USD 103.76.
The Middle East conflict has kept energy markets under pressure. Attacks involving Yemen’s Iran-aligned Houthis and delayed talks between Iran and Gulf countries have added uncertainty around regional supply. Saudi Arabia has also shut its East-West pipeline after attacks affected the route that allows oil shipments to bypass the Strait of Hormuz.
“Energy is doing most of the damage on the inflationary front at present,” Ameriprise Financial chief market strategist Anthony Saglimbene said.
Higher oil prices can feed into fuel, transport and production costs, which remain important factors in the Federal Reserve’s inflation assessment.
Technology stocks also remained under pressure after Monday’s selloff. Alphabet and Microsoft shares fell more than 1% in pre-market trading, while NVIDIA traded slightly higher after chipmakers posted broad losses in the previous session.
The technology sector faced fresh attention after leading artificial intelligence executives called for a slower pace of advanced AI development amid safety concerns. The comments added another issue for investors already watching rising interest rates and borrowing costs.
Crypto-linked stocks also dropped as Bitcoin fell nearly 3%. Coinbase and Strategy fell more than 4.5% in premarket trading. Investors were also monitoring the wider risk-asset market as Treasury yields stayed above 5%.
Wall Street’s focus now turns to Wednesday’s Federal Reserve decision, with oil prices, Treasury yields and inflation data likely to remain key market drivers before and after the announcement.
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