US stock futures fall as oil prices, bond yields rise ahead of Fed minutes

US stock futures fell on Wednesday, October 7, as oil prices and Treasury yields moved higher, weighing on investor sentiment a day after the S&P 500 closed at a record high.

Futures tied to the Dow Jones Industrial Average fell about 0.4%, while S&P 500 futures slipped 0.2%. Nasdaq-100 futures were down around 0.4%.

Treasury yields rise ahead of Fed minutes

The rise in bond yields came ahead of the release of minutes from the Federal Reserve’s September policy meeting, which investors will scrutinise for clues on the central bank’s interest-rate path.

The minutes could offer insight into whether the Fed’s September rate hike was a one-off move or whether policymakers see scope for further increases.

The benchmark 10-year US Treasury yield rose about 6 basis points to 5.326%, while the 30-year yield climbed nearly 7 basis points to 5.706%, its highest level since 2002.

Oil prices add to inflation concerns

Oil prices also extended gains, with US crude futures moving closer to $90 a barrel. Brent crude rose about 1% to $101.92 a barrel.

Higher oil prices could add to inflation concerns and strengthen expectations of tighter monetary policy, putting further pressure on equities.

The S&P 500 closed above 7,800 for the first time on Tuesday, helped by gains in chipmakers. Easing Treasury yields had also provided support to stocks.

European, Asian stocks fall

European stocks declined on Wednesday, with the pan-European Stoxx 600 down 0.8%. The FTSE 100 fell 0.7%, France’s CAC 40 declined 1% and Germany’s DAX dropped 1.3%. Italy’s FTSE MIB fell 1.9%.

In Asia, Japan’s Nikkei 225 closed 0.92% lower, while the Topix fell 0.7%. South Korea’s Kospi declined nearly 2% and the Kosdaq lost 2.34%.

Australia’s S&P/ASX 200 ended little changed, while mainland Chinese markets remained closed for the Golden Week holiday.

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