U.S. stock futures were struggling to make headway early Thursday after oil hit a 13-month high, underpinning bond yields.
How are stock-index futures trading
S&P 500 futures
dipped 3 points, or 0.1%, to 4310
Dow Jones Industrial Average futures
fell 43 points, or 0.1%, to 33748
Nasdaq 100 futures
eased 24 points, or 0.2%, to 14715
On Wednesday, the Dow Jones Industrial Average
fell 69 points, or 0.2%, to 33550, the S&P 500
increased 1 points, or 0.02%, to 4275, and the Nasdaq Composite
gained 29 points, or 0.22%, to 13093.
What’s driving markets
Equity investors continued to warily eye the trajectory of bond yields. The S&P 500 is down 5.2% so far in September as long-term borrowing costs have risen sharply in recent weeks to their highest since 2007.
Early action Thursday saw the 10-year Treasury yield
little changed around 4.61%, helping S&P 500 futures to nudge just a tad lower..
Propelling bond yields upwards in recent sessions — alongside fears of increased supply of government debt and relatively sturdy economic data of late — is a surge in the cost of energy.
“The continuing surge in oil prices adds a layer of complexity to the economic landscape,” said Stephen Innes, managing partner at SPI Asset Management.
“At the very least, it will mitigate the disinflationary trend and likely prolong a period of elevated interest rates. In this environment, central banks will face a challenging task in balancing the objectives of promoting economic growth and managing inflation,” he added.
Traders will be interested to see whether Federal Reserve Chair Jerome Powell addresses this issue when he makes comments at 4 p.m. Eastern. Fed Governor Lisa Cook is scheduled to speak before that, at 1 p.m.
There will also be a batch of U.S. economic updates for investors to ponder, including the weekly jobless claims report and the revision to second-quarter GDP, both due at 8:30 a.m., and pending home sales for August at 10 a.m. The Fed’s favored inflation gauge, the core PCE index, will be released on Friday.
Weakness across Asian bourses was contributing to Thursday’s cautious tone, with Hong Kong’s Hang Seng
falling 1.4% to hit a new low for the year after trading of heavily indebted Chinese property developer China Evergrande Group
was suspended. Mainland China’s markets will now be shut until Oct. 9 for the Golden Week holiday.