US stock futures fell on Thursday as crude oil prices moved above USD 100 a barrel and Treasury yields climbed to multi-year highs. Investors also assessed producer inflation data ahead of Friday’s consumer price index report and the Federal Reserve’s September 16 interest rate decision.

Dow Jones Industrial Average futures fell about 0.3%, S&P 500 futures lost nearly 0.5%, and NASDAQ-100 futures dropped more than 1%. The declines followed a three-day slide for the major US indexes.

Oil Prices Rise Above USD 100 as Middle East War Disrupts Supply

US West Texas Intermediate crude climbed more than 4% and traded above USD 100 a barrel on Thursday. Brent crude also moved above USD 105. The increases came as the US-Iran war continued to disrupt energy flows through the Strait of Hormuz and the Red Sea.

The supply pressure also reached the liquefied natural gas market. QatarEnergy has discussed long-term LNG purchases from US suppliers, according to Bloomberg reporting cited in the market updates. Qatar previously supplied about one-fifth of global LNG, but tanker risks through the Strait of Hormuz have reduced its shipments.

Treasury Yields Climb as Inflation Concerns Return

Treasury yields rose as investors priced in the risk that higher energy costs could keep inflation elevated. The 10-year Treasury yield moved above 4.9%, its highest level since 2023. The two-year yield also rose to around 4.49%, reaching its highest level since 2024.

The move came even after the US Treasury said it would buy up to USD 6 billion in longer-dated government debt. Higher bond yields can raise borrowing costs and reduce the relative appeal of stocks. Technology and other high-growth shares faced heavier pressure in premarket trading.

Producer Inflation Keeps Fed Rate Path Uncertain

The US Producer Price Index rose 0.4% in August on a seasonally adjusted monthly basis. On an annual basis, producer prices increased 5.4%. Reuters reported that economists had expected a 5.3% annual increase.

The data left investors focused on the Federal Reserve’s next move. Stephen Coltman, head of macro at 21shares, described the PPI release as ‘inconclusive’ because it did not settle whether the Fed would raise rates next week. CNBC and Reuters cited CME FedWatch figures showing about a 70% to 74% chance of a quarter-point rate increase.

Chip Stocks Slide While Some Premarket Names Gain

Semiconductor shares fell as higher oil prices and Treasury yields raised concerns about slower economic activity. Intel dropped about 3% in premarket trading, while Micron Technology fell around 2%. Copper miners also weakened, with Freeport-McMoRan and Southern Copper down about 7% as copper prices declined.

Other stocks moved in different directions. Meta Platforms gained after JPMorgan upgraded the shares, while Novartis rose after a report that a major shareholder wanted changes to the company’s board. 

American Eagle Outfitters fell sharply after the retailer maintained its annual comparable sales forecast. Apple also edged higher after introducing its USD 1,999 folding iPhone.

Investors Await CPI and the Federal Reserve Decision

Markets will next turn to Friday’s consumer price index report, which will provide another inflation reading before the Fed meeting. Both CPI and PPI feed into the personal consumption expenditures price index, the Fed’s preferred inflation measure, although that report will come after the September 16 rate decision.

Brian Jacobsen, chief economic strategist at Annex Wealth Management, said, “If the Fed hikes next week, it should be a symbolic hike,” adding that a rate increase would not directly solve the diesel-driven inflation pressure he sees in producer prices. Investors will continue to track oil prices, Treasury yields, and inflation data as they assess the likely path for US interest rates.

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