Dow Futures Drop 399 Points as Oil Surges and 10-Year Yield Climbs to 5.34%

U.S. stock index futures fell on Thursday as a sharp rise in oil prices and higher Treasury yields renewed inflation concerns, according to Reuters.

At 6:14 a.m. ET, Dow futures were down 399 points, or 0.78%, while S&P 500 futures lost 0.4% and Nasdaq 100 futures shed 0.57%, Reuters reported. Brent crude jumped more than 4% after attacks on shipping in the Gulf and the Strait of Hormuz, while U.S. offshore production was cut as a hurricane threatened operations, according to Reuters. The benchmark 10-year Treasury yield climbed to 5.34%, though it stayed below earlier session highs.

Chip stocks face renewed scrutiny

The decline extended Wednesday’s pullback, when rising yields and oil prices knocked the S&P 500 and Nasdaq from record highs and ended a four-day Dow winning streak, according to Reuters. Chipmakers were under pressure even after Samsung Electronics forecast a record quarterly profit of $80.2 billion: Nvidia dipped 0.6% in premarket trading, Broadcom eased 1.4% and Micron fell 1.2%, Reuters reported. Reuters also noted a Wall Street Journal report that Broadcom is lining up $50 billion in financing for OpenAI, raising concerns about heavy technology-sector debt issuance competing for capital.

Federal Reserve Governor Christopher Waller signaled a possible pause at the central bank’s upcoming meeting, while saying further increases would likely be needed to bring inflation back to the Fed’s 2% target but that there was flexibility on pace, according to Reuters. Traders broadly expect the Fed to hold steady in October, with a December increase still possible, Reuters reported, citing CME FedWatch. In Europe, the STOXX 600 fell 0.9% and bank shares dropped nearly 2% as bond yields climbed, according to Reuters.

Reporting based on coverage by Reuters.