S&P 500 futures held flat on Wednesday as oil surged past $100 a barrel for the first time since July, while a widening Middle East conflict kept investors cautious ahead of this week's U.S. inflation data. Dow futures slipped and European indices fell as markets braced for rate decisions from the Federal Reserve and the ECB.
U.S. stock index futures were subdued on Wednesday as oil prices blew past $100 for the first time since July, keeping investors cautious ahead of inflation data later this week. The move came as the U.S.-Iran war dragged into its seventh month and raised the risk of a broader regional conflict.
U.S. futures barely move
At 5:05 a.m. ET, Dow E-minis were down 84 points, or 0.16%. S&P 500 E-minis were flat. Nasdaq 100 E-minis inched 12 points, or 0.04%, higher at the same time.
Middle East escalation drives oil above $100
Brent crude futures were last up 2.06% at $99.94 a barrel after breaching the $100 mark earlier in the session. The surge followed coordinated strikes on Tuesday by Iranian-backed Houthis in Yemen targeting several Saudi Arabian cities, which coincided with direct U.S. strikes on Iranian oil tankers. Those U.S. strikes were met by an Iranian missile strike on a U.S. military base in Jordan.
Fed rate-hike bets firm up
Federal Reserve Chair Kevin Warsh's focus on controlling prices has led traders to expect a rate hike this month. Markets now see a 60.4% chance that rates will be increased by 25 bps when the central bank meets next week, according to the CME FedWatch tool. The Consumer Price Index report due Friday and the Producer Price Index reading Thursday will also be watched for clues on the Fed's rate outlook.
European equities slip as ECB hike looms
Across the Atlantic, Germany's DAX fell 0.4%, France's CAC 40 was down 0.6% and London's FTSE 100 slipped 0.2%. Money markets have almost fully priced in a 25-basis-point interest rate increase from the ECB on Thursday, which would take the deposit facility rate to 2.50%.
A stronger reading in Friday's inflation data could move rate expectations before markets open Monday.
Sources: Economy News, All News
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