Oil jumps, yields hit 5.35% as futures slide

U.S. stock futures fell on Thursday morning as oil prices and Treasury yields climbed. As of about 7:30 a.m. ET, futures tracking the Dow Jones Industrial Average were down 1 per cent, with S&P 500 futures down 0.6 per cent and Nasdaq futures down 0.8 per cent, Investopedia reported. The S&P 500 and Nasdaq had slipped on Wednesday from record closes set on Tuesday.

Oil drove the move. The Atlantic and NBC News reported on Wednesday that the White House has asked the Pentagon to draw up plans for strikes on Iran that could be carried out before the midterm elections, according to Investopedia, which said U.S. crude futures were up 5 per cent at $92.71 a barrel. Brent crude rose more than 5 per cent to above $105 a barrel in early trading, NBC News reported, adding that no decisions had yet been made about resuming combat operations, according to people familiar with the discussions. Gold futures were around $4,136 an ounce, and bitcoin traded near $82,500, below highs of around $87,000 earlier in the week, according to Investopedia.

The 10-year Treasury yield rose to about 5.35 per cent, NBC News and Investopedia reported. The yield touched 5.37 per cent on Wednesday, its highest since 2002, according to Investopedia, before ending the day at 5.28 per cent, according to Treasury Department data.

A Fed that is raising rates again

Higher oil prices add to inflation pressure as the Federal Reserve tightens policy. Minutes of the Fed's 15-16 September meeting, released on Wednesday, show that all participants supported raising the federal funds target range by a quarter point to 3.75 to 4 per cent. It was the Fed's first rate increase since July 2023, and the vote was unanimous. The minutes also said the New York Fed, acting as fiscal agent for the U.S. Treasury, carried out the U.S. part of a joint U.S.-Japan intervention to support the yen in late July, using Treasury funds rather than the Fed's own portfolio. The yen held near 158 per dollar in Asian trading on Thursday, CNBC TV18 reported.

Earnings: PepsiCo, Samsung, Applied Digital

PepsiCo reported third-quarter revenue of $25.27 billion and core earnings of $2.34 a share, both modestly above estimates, but cut its full-year core EPS growth forecast to 2.5 to 3.5 per cent from a prior range of 5 to 7 per cent, according to Investopedia. The shares were up more than 2 per cent before the open.

Memory-chip stocks fell before the open after Samsung's preliminary third-quarter results, about 195 trillion won in sales and about 107.4 trillion won in operating profit, came in below some analyst estimates despite being a record, Investopedia and CNBC TV18 reported. The Philadelphia Semiconductor Index had already fallen 1.2 per cent on Wednesday, before Samsung's figures were published. Applied Digital shares rose nearly 2 per cent before the open after the data centre operator reported fiscal first-quarter revenue of $341.9 million, up more than 320 per cent from a year earlier and well above forecasts, according to Investopedia.

Asia and India

MSCI's Asia Pacific index fell 0.3 per cent in Thursday morning trading, with Japan's Nikkei 225 down 1.12 per cent, the Topix down 1.42 per cent and South Korea's Kospi down 0.56 per cent, CNBC TV18 reported. Mainland Chinese markets reopened after a holiday.

In India, the Sensex closed down 1,045.46 points, or 1.44 per cent, at 71,593.24, and the Nifty 50 fell 371.25 points, or 1.64 per cent, to 22,231.80, the Hindu BusinessLine reported. It was the market's second straight day of losses, after the Reserve Bank of India on Wednesday raised its repo rate by 25 basis points to 5.50 per cent and changed its stance to "calibrated tightening".