Market Snapshot: Dow Jones index futures slip with Treasury yields near 16 year highs, oil jumping and tech earnings ahead

What’s driving markets

The third quarter U.S. corporate earnings reporting season continues to absorb investors, with P&G
PG,
+3.07%,
Morgan Stanley
MS,
-5.68%
and U.S. Bancorp
USB,
-1.85%
among those presenting their numbers before the opening bell on Wall Street, while Netflix
NFLX,
-0.87%,
Tesla
TSLA,
-0.95%
and Lam Research
LRCX,
-2.90%
will feature after the close.

However, investor sentiment has been soured after reports saying hundreds had died following an explosion at a Gazan hospital raised fears that the Israel-Hamas war would draw in other forces in the region.

See: Why Biden’s planned Israel visit is calming markets — for now

Recent hopes that a trip by U.S. President Joe Biden to the Middle East might boost diplomacy have been damped after Jordan cancelled a summit at which Biden was to meet the Jordanian and Egyptian leaders, as well as Mahmoud Abbas, President of the Palestinian Authority.

“Overnight we’ve seen a fresh risk-off tone because of the geopolitical situation, and …that has led to a clear reaction in markets, said Henry Allen, strategist at Deutsche Bank. Concerns about compromised oil supplies from the regions helped push Brent crude
BRN00,
+1.30%
back around $92 per barrel, while gold prices
GC00,
+1.61%
hovered $1,960 an ounce.

Previous upsurges in geopolitical anxiety have seen a rush to perceived haven assets such as U.S. Treasurys, pushing down yields.

See: Long-term U.S. Treasury yields may resume their march higher despite recent bond-market swings, BlackRock says

But the 10-year Treasury yield
BX:TMUBMUSD10Y
on Wednesday touched its highest level since 2007, around 4.87%, as traders continued to express concern about sticky inflation following news released the day before showing U.S. retail sales growing more than expected in September.

In U.S. economic data Wednesday, construction of new U.S. homes rebounded 7% in September to an annual pace of 1.36 million units after a sharp 1.5% drop in the prior month, though building permits, a sign of future construction, fell 4.4% to a 1.47 million rate.

U.S. economic update set for release on Wednesday also includes the Fed Beige Book at 2 p.m. Eastern.

Fed officials due to make comments include Governor Chris Waller at noon; New York Fed President John Williams at 12:30 p.m.; Richmond Fed President Tom Barkin at 1 p.m.; and Philadelphia Fed President Patrick Harker at 3:15 p.m..

Companies in focus

• Morgan Stanley 
  MS,
  -5.68%
  fell about 3% in premarket trading on Wednesday after the bank said its third-quarter profit fell 10% amid weakness in its investment banking business, but its trading and asset management revenue rose.

• Procter & Gamble 
  PG,
  +3.07%
  rose 1.8% in the premarket after the consumer goods giant posted better-than-expected fiscal first-quarter earnings early Wednesday, boosted by another increase in prices.

• United Airlines
  UAL,
  -7.25%
  shares fell 5.4% on Wednesday morning after the carrier warned that the Israel-Hamas war and higher jet fuel costs could have an impact on fourth-quarter results.