US stock futures moved lower on Wednesday as Brent crude climbed above USD 100 per barrel, adding pressure to global markets. Investors are tracking rising oil prices, Treasury yields and upcoming inflation data ahead of the Federal Reserve’s September policy meeting.

Dow Jones Industrial Average futures fell about 331 points, or 0.6%, while S&P 500 futures declined 0.4%. NASDAQ-100 futures dropped 0.5%. The moves followed losses across major Wall Street indexes on Tuesday.

US Stock Futures Slip as Brent Crude Crosses USD 100

Brent crude rose more than 2% and briefly moved above USD 100 per barrel for the first time since July. Oil prices climbed as tensions between the United States and Iran raised concerns about energy supplies from the Middle East. Reports of attacks involving oil tankers and military assets added to concerns about shipping through the Strait of Hormuz.

The oil rally followed another difficult session for US stocks. The Dow Jones Industrial Average dropped 1.2% on Tuesday, its weakest session in nearly three weeks. Meanwhile, the S&P 500 fell 0.6%, while the NASDAQ Composite lost 0.3%. Higher energy prices also pushed investors to reassess inflation risks.

Kara Murphy, Investment Chief at Kestra Investment Management, described the market move as ‘a little bit of a speed bump.’ She added that investors have fewer earnings reports to follow and are paying more attention to market risks.

Treasury Yields Rise as Traders Watch Inflation Data

The 10-year US Treasury yield briefly moved above 4.8% on Tuesday as higher oil prices renewed concerns about inflation. Rising bond yields can place pressure on stock valuations because investors may demand higher returns from equities when government bonds offer better yields.

Investors are now preparing for two key inflation reports. The US Producer Price Index is scheduled for Thursday, while the Consumer Price Index will follow on Friday. Both reports could shape expectations before the Federal Reserve’s policy decision next week.

Markets currently see about a 60% probability of a 25-basis-point rate increase. A stronger-than-expected inflation reading could increase expectations for a hike. However, softer monthly inflation could support the case for holding rates steady.

Fed Chair Kevin Warsh and other policymakers have kept inflation at the center of recent comments. Therefore, oil prices and incoming inflation data remain key factors for traders as they assess the September rate decision.

Global Markets Weaken While Investors Assess Risk

European stocks also traded lower on Wednesday. The Stoxx 600 fell about 0.7%, while Germany’s DAX and France’s CAC 40 declined. Italy’s FTSE MIB recorded a steeper drop, while the UK’s FTSE 100 also moved lower.

Asian markets produced mixed results. Japan’s Nikkei 225 closed 0.19% lower, while South Korea’s Kospi gained 1.4%. Australia’s S&P/ASX 200 declined 0.11%, and China’s CSI 300 gained 0.3%.

Meanwhile, investors continue to watch market volatility ahead of the November US midterm elections. The Cboe Volatility Index remains near 15, below its long-term median of 17.6. 

Although volatility remains low, traders face several events in the coming weeks, including inflation reports, the Federal Reserve meeting and further developments in the US-Iran conflict.

For US markets, Wednesday’s trading remains closely tied to oil prices, Treasury yields and expectations for the Federal Reserve’s next move.

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