Dow futures dropped 0.6% Wednesday as renewed U.S.-Iran hostilities pushed crude oil above $84 a barrel hours before the Federal Reserve's rate decision. S&P futures were flat and Nasdaq-100 futures inched down, with SK Hynix an early earnings loser after missing second-quarter sales estimates.
Futures for the Dow Jones Industrial Average and the other major stock indexes fell Wednesday on renewed U.S.-Iran hostilities ahead of the Federal Reserve's interest-rate decision and Fed Chair Kevin Warsh's press conference. Ahead of the open, Dow futures dropped 0.6% while S&P futures were flat and Nasdaq-100 futures inched down.
Rates and crypto moved alongside. The 10-year Treasury yield was up at 4.63% and Bitcoin rose near $64,200. Among exchange traded funds, the Invesco QQQ edged up while the State Street SPDR S&P 500 was flat before the opening bell.
Iran missiles push crude toward $84.40
West Texas intermediate crude oil futures spiked more than 6%, trading around $84.40 per barrel, after the U.S. said it intercepted Iran missiles targeting American bases in the Mideast. That ends several days of a ceasefire between the two nations.
Bloomberg Television reported that President Donald Trump told Fox News he vowed to strike back hard against Iran, while Iranian-backed Houthis in Yemen claimed to attack another Saudi oil tanker in the Red Sea. Inside the Dow industrials, Chevron jumped more than 2% premarket amid the sharp rise in oil prices, and Procter & Gamble sold off 3% after reporting earnings.
Fed decision lands at 2 p.m. ET
The central bank's two-day policy meeting concludes Wednesday afternoon, with the interest rate decision set for 2 p.m. ET. A rate hike is unlikely but not out of the question. Going into this week's meeting, markets saw 64% odds of no move and 36% odds of a quarter-point tightening. The odds of a hike by the September meeting are around 77%.
SK Hynix misses ahead of Meta and Microsoft
Memory chip leader SK Hynix, an Nvidia partner, declined more than 2% premarket after missing sales estimates for the second quarter. Revenue rose 257% year over year to $54.4 billion, short of the $57.6 billion analysts polled by FactSet had expected, while net profit rocketed to $64.5 billion on gains related to investment assets the company didn't specify.
Meta Platforms and Microsoft report after the close. Analysts see Meta's earnings rising less than 1% to $7.19 per share as revenue jumps 27% to $60.2 billion, and Microsoft earnings are expected to rise 16% to $4.24 per share on revenue of $82.9 billion. Capital spending guidance will be key for AI stocks after Alphabet raised capex spending plans despite negative cash flow.
Sources: Investor's Business Daily, Investor's Business Daily
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