S&P 500 futures fell early Thursday as oil prices jumped and Treasury yields climbed, pulling Wall Street off this week's record highs. Fed Governor Christopher Waller said more rate hikes are likely needed to curb inflation, while chipmakers stayed under pressure despite a stronger-than-expected profit forecast from Samsung.
S&P 500 futures lost 31.5 points, or 0.4%, at 6:14 a.m. ET on Thursday, as rising oil prices and a fresh climb in Treasury yields pressured US stock index futures. Dow E-minis fell 399 points, or 0.78%, while Nasdaq 100 E-minis dropped 180.25 points, or 0.57%.
The rebound in yields and oil had already knocked the S&P 500 and Nasdaq from record highs a day earlier, while the Dow snapped a four-day winning streak. Brent crude jumped more than 4% after attacks on shipping in the Gulf and the Strait of Hormuz, and as the US cut output with a hurricane menacing offshore production.
Waller flags more rate hikes ahead
Fed Governor Christopher Waller said additional rate hikes will likely be needed to lower inflation to the Fed's 2% target, though he said there was "flexibility" about the pace of increases. Traders widely expect the Fed to hold rates steady at its October meeting, but a December hike remains on the cards, according to CME FedWatch.
The September Fed minutes reinforced that message: most policymakers saw more interest rate rises ahead, and markets still see three more hikes over the coming year, starting in December. The benchmark 10-year Treasury yield climbed to 5.34%, though it remained below its earlier session high.
Chipmakers slip despite Samsung's record forecast
Samsung Electronics forecast a record quarterly profit of $80.2 billion, above analysts' estimates, but its shares closed marginally lower. The results failed to lift chip stocks broadly: Nvidia dipped 0.6% in premarket trading, Broadcom eased 1.4% and Micron Technology fell 1.2%.
Debt tied to the AI buildout added to the unease. The Wall Street Journal reported Broadcom is lining up $50 billion of financing for OpenAI, with Oracle also seeking an unspecified sum. Separately, SpaceX and Nvidia are arranging chip finance of up to $40 billion, and Broadcom and Anthropic are discussing debt financing on a similar scale.
Not every chip-linked name fell: Wolfspeed soared 16.6% after a $1.5 billion conditional loan commitment from the US Department of Defense to expand domestic production of silicon carbide materials and power devices.
Sources: Investing.com, Investing.com
Trading involves risk.
Risk Disclaimer
