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Oil surge drags US stock futures as inflation fears return

S&P 500 futures were down about 0.5% and traders boosted odds of a September Fed rate hike as Treasury yields moved higher.

Reported · Written up by our desk · Major Pairs

US stock futures slipped in early European trading as investors digested a sharp rise in oil prices tied to renewed conflict in the Middle East, which is pushing up energy costs and reviving inflation concerns, according to FXStreet.

Dow Jones futures fell about 0.45% to around 53,000, S&P 500 futures declined roughly 0.5% to about 7,660, and Nasdaq 100 futures dropped around 0.83% to near 29,270.

FXStreet said the oil-driven inflation worry lifted Treasury yields and helped firm expectations for additional Federal Reserve tightening, with traders increasing bets on a September rate hike after recent Fed comments indicated further action remains possible until inflation returns toward the central bank’s 2% target.

The pre-market weakness follows a softer session on Monday, when all three major indices ended lower, and markets are now looking ahead to a busy US data calendar, including manufacturing and services activity releases and Friday’s August Nonfarm Payrolls report.

Latest closeS&P 500 7,686.14 ▼0.6%|Nasdaq Comp. 26,370.89 ▼0.6%|Dow Jones 53,185.90 ▼0.7%

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