US Stock Futures Slide as Traders Raise Bets on October Fed Rate Hike

US stock futures fell Thursday, September 24, as rising Treasury yields and oil prices renewed concerns about inflation and further Federal Reserve rate increases. A drop in Oracle shares added pressure on technology stocks before the opening bell.

Why are US Stock Futures Falling?

NASDAQ-100 futures fell about 1% in early trading. S&P 500 futures lost 0.6%, while Dow Jones Industrial Average futures declined 159 points, or 0.3%. The moves pointed to a second day of losses for the US stock market after all three major indexes closed lower on Wednesday.

The S&P 500 ended Wednesday at 7,706.03, down 0.75%. The NASDAQ Composite fell 1.13% to 26,936.04, and the Dow dropped 352.10 points to 51,511.59. Thursday’s futures figures remained subject to change before regular trading began.

Oracle shares fell more than 5% before the bell after Bloomberg reported that the company had cited force majeure in connection with a New Mexico data center project. According to the report, the provision could protect Oracle if construction faces delays. The reported step drew attention to the timing and cost of data centers used for artificial intelligence.

How are Treasury Yields and Oil Prices Affecting Stocks?

The 10-year Treasury yield rose to about 5.15%, near a level last reached in 2007. Meanwhile, the 30-year yield touched 5.446%, its highest level since 2004. Bond yields rise when prices fall, and higher yields can increase borrowing costs for households and businesses.

Oil also moved higher. Brent crude futures gained approximately 1% to USD 105 a barrel, while West Texas Intermediate futures rose about 1% to around USD 93. Higher fuel and transport costs can feed into the prices companies charge customers.

Traders increased their expectations for another Federal Reserve rate increase. CME FedWatch pricing put the chance of an October hike above 70%, compared with roughly 55% a week earlier. These figures reflect market positions and can change quickly; they do not indicate a decision by the Fed.

UBS Global Wealth Management strategists said Thursday that they expected energy disruption to remain limited. They also cautioned that market volatility could continue as investors assessed inflation, government debt and spending on artificial intelligence.

What Did the US Jobless Claims Report Show?

The Labor Department reported 197,000 initial unemployment claims for the week ending September 19. That was 1,000 fewer than the previous week’s revised total of 198,000. The earlier figure had first been reported as 196,000, which explains why some accounts described the new total as an increase.

Continuing claims reached 1.719 million for the week ending September 12, up 2,000 from the revised prior-week figure. The four-week average of initial claims fell to 202,250. Together, the figures showed that claims remained low even as investors watched for any change in hiring or layoffs.

Investors also weighed strong readings from S&P Global’s US business surveys. In a Wednesday note, BMO Capital Markets strategist Vail Hartman said the data gave policy rates and Treasury yields room to move higher. He warned that stronger demand could add to inflation pressure, although that outcome remains uncertain.

What Else are US Stock Market Investors Watching?

President Donald Trump and Xi Jinping were due to meet Thursday in Washington. Trade, artificial intelligence, Taiwan and the Iran war were among the expected topics. US Treasury Secretary Scott Bessent said the countries had agreed to extend their trade truce through January 10, beyond its previous November expiry. Investors awaited further details from the meeting.

Corporate results offered another focus. Darden Restaurants shares fell after its quarterly results missed expectations, while Costco was scheduled to report after Thursday’s closing bell. The combination of earnings, bond yields and oil prices gave investors several developments to assess as regular US trading approached.

Also Read: Indian IT Sector Stocks vs Global Tech Stocks: Which is Better?