Traders work at the New York Stock Exchange on Aug. 25, 2026.
NYSE
Stock futures dropped Thursday after U.S. oil prices topped $100 a barrel, amid growing fears of higher inflation from a prolonged war in the Middle East.
Futures tied to the Dow Jones Industrial Average dropped 109 points, or 0.2%. S&P 500 futures fell 0.5%, while Nasdaq-100 futures were down 1.2%.
Higher oil prices continued to weigh on sentiment, as the war between the U.S. and Iran continued into a seventh month. U.S. West Texas Intermediate futures for October jumped above $100 per barrel. Futures for the international benchmark Brent crude for November delivery spiked above $105 a barrel.
The jump in oil prices pushed the 10-year Treasury yield above 4.9%, the highest level since November 2023.
High beta chip stocks that have led the bull market traded lower on fears higher rates and oil could slow the economy. Intel and Micron Technology fell 3% and 2% respectively in premarket trading.
A tame wholesale inflation report failed to allay fears coalescing around higher rates and oil prices. August’s producer price index, a measure of wholesale inflation, rose a seasonally adjusted 0.4% for the month, in line with the Dow Jones consensus. On an annual basis, that put PPI at 5.4%, which is still well above the Fed’s 2% inflation target.
The report comes ahead of the closely watched consumer price index on Friday. Both numbers feed into the Fed’s primary inflation gauge, the personal consumption expenditures price index, which won’t be released until after the Fed’s interest rate vote Sept. 16.
“The PPI release itself was inconclusive, in that doesn’t really help to settle the question of ‘hike or no hike’ from the Fed next week, but WTI oil prices surging back above $100 and Treasury yields hitting new highs is certainly raising the stakes for investors ahead of tomorrow’s crucial CPI report,” wrote Stephen Coltman, head of macro at 21shares.
Fed funds futures were last pricing in a 74% likelihood of a quarter point hike following the conclusion of next week’s meeting, according to the CME FedWatch Tool.
The major averages are coming off a three-day slide, after the Treasury Department said it would buy back up to $6 billion in longer-term debt – triple the usual amount. Less than a month ago, the Treasury said it would more than double the size of its $2 billion government debt repurchases.
— CNBC’s Jeff Cox and Spencer Kimball contributed to this report.
Leave a Reply