December Nasdaq 100 E-Mini futures (NQZ26) are down -0.46% this morning as rising Treasury yields dampened risk appetite, prompting investors to trim exposure to chipmakers.
The price of WTI crude edged higher on Wednesday as traders weighed supply risks from a storm heading toward U.S. oil-producing regions and renewed Houthi attacks in Saudi Arabia against a recovery in Middle East crude supplies.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
The rise in oil prices drove bond yields higher. The 10-year T-note yield rose three basis points to 5.32%.
Higher yields weighed on chip and AI infrastructure stocks in pre-market trading. Chipmakers were also pressured by a selloff among their European and Asian peers. BE Semiconductor Industries was a major laggard in Europe, tumbling over -8% after UBS double-downgraded the stock to Sell from Buy, while SK Hynix fell nearly -3% in Seoul ahead of a lockup expiry on its American depositary receipts. Sandisk (SNDK) was down over -2%, while Micron Technology (MU) and Marvell Technology (MRVL) each fell more than -1%.
Investors are now looking ahead to the release of the Federal Reserve’s September meeting minutes.
In yesterday’s trading session, Wall Street’s major indexes ended in the green, with the S&P 500 and Nasdaq 100 notching new record highs. Most members of the Magnificent Seven advanced, with Amazon.com (AMZN) rising nearly +2% and Microsoft (MSFT) gaining about +0.8%. Also, Constellation Energy (CEG) surged more than +12% and was the top percentage gainer in the Nasdaq 100 after the company reached a 20-year agreement with Alphabet’s Google to add 890 megawatts of nuclear capacity to the PJM power grid. In addition, Marvell Technology (MRVL) climbed over +5% after the company unveiled a plan at its investor day targeting $70 billion to $90 billion in fiscal 2031 revenue. On the bearish side, Seagate Technology Holdings (STX) slumped over -9% and was the top percentage loser in the S&P 500 and Nasdaq 100 after Bloomberg reported that the company was competing with privately held Toshiba to acquire TDK Corp.’s magnetic-heads business for hard-disk drives.
Economic data released on Tuesday showed that the U.S. August trade deficit widened to $105.6 billion, its largest since March 2025. Economists had expected a $100.8 billion deficit.
San Francisco Fed President Mary Daly said on Tuesday that she supported September’s interest-rate hike amid rising inflation risks, but believes the need for further increases will depend largely on whether the shocks driving inflation higher appear likely to fade or, conversely, continue to intensify. Separately, Kansas City Fed President Jeff Schmid said the U.S. central bank still needs to raise its policy rate further to bring down inflation, even as higher long-term yields weigh on activity in some parts of the economy.
U.S. rate futures are currently pricing in a 78.4% probability of no rate change and a 21.6% probability of a 25-basis-point rate hike at this month’s Fed meeting.
Today, market participants will closely watch the minutes from the Fed’s September 15-16 meeting. The Federal Open Market Committee voted unanimously last month to raise interest rates by 25 basis points for the first time in three years. The minutes could show that many policymakers were increasingly concerned about underlying price pressures and expected at least one more rate increase before year-end. However, last week’s softer-than-expected employment and inflation data, coupled with dovish comments from two senior officials, Fed Vice Chair Philip Jefferson and New York Fed President John Williams, prompted traders to sharply scale back bets on an October hike. Economists said that even if the minutes underscore how hawkish officials were in September, the data released since then have bolstered the case for patience.
On the economic front, investors will focus on the Fed’s Consumer Credit report, which is set to be released later today. Economists expect U.S. consumer credit to increase by $14.5 billion in August, compared with an $18.1 billion increase in July.
The EIA’s Weekly Petroleum Status Report will be released today as well. Economists expect crude oil inventories to increase by 1.9 million barrels in the week ended October 2nd, compared with an increase of 0.9 million barrels in the prior week.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 5.32%, up +0.62%.
The Euro Stoxx 50 Index is down -1.00% this morning, snapping a three-session winning streak as rising bond yields weighed on sentiment. Bank stocks led the declines on Wednesday. Chip-related stocks also slumped, with BE Semiconductor Industries (BESI.NA) plunging over -8% after UBS double-downgraded the stock to Sell from Buy. At the same time, automobile stocks climbed after Bloomberg reported that the European Union was weighing limits on imports of Chinese hybrid vehicles into the bloc. Data from the federal statistics office released on Wednesday showed that Germany’s monthly industrial production rebounded sharply in August, as manufacturers continued to adjust to a shifting environment driven by volatile energy prices. Meanwhile, Eurozone government bond yields marched higher on Wednesday, with yields in more heavily indebted countries rising more sharply than those in less indebted peers, as concerns over France’s budget and oil prices remained in focus. In corporate news, Pennon Group (PNN.LN) tumbled over -19% after announcing an operational reset to boost investment, including a new funding plan that involves a rebased dividend and a 550 million-pound ($730.2 million) rights issue.
Germany’s Industrial Production data was released today.
The German August Industrial Production rose +2.0% m/m, stronger than expectations of +0.5% m/m.
Japan’s Nikkei 225 Stock Index ($NKY) closed down -0.92%, while mainland China’s financial markets were closed for a holiday.
Japan’s Nikkei 225 Stock Index closed lower today as investors locked in profits after a recent rally. Semiconductor and other AI-related stocks led the declines on Wednesday. Bank stocks also slumped. In addition, shares of beer makers declined after the nation’s competition authority launched an investigation into suspected price fixing. Government data released on Wednesday showed that Japan’s real wages rose for an eighth consecutive month in August, marking the longest stretch of gains in nearly a decade. Real wages, adjusted for inflation and excluding rents, increased 1.5% in August from a year earlier. Sustained wage growth strengthens the case for the Bank of Japan to continue raising interest rates. Separately, preliminary data showed that Japan’s leading economic indicators index, which gauges the economic outlook for a few months ahead based on data such as job offers and consumer sentiment, climbed in August to its highest level since January 2014. Meanwhile, Japanese government bond yields were mixed on Wednesday, with shorter-dated yields rising after a dovish BOJ official supported further rate hikes and longer-dated yields falling in tandem with an overnight decline in U.S. Treasury yields. BOJ policy board member Ayano Sato said she supports raising interest rates in several stages, signaling that even dovish officials see a need to address inflation risks. Elsewhere, Prime Minister Sanae Takaichi said her administration is ready to review spending and revenue plans if bond yields move unexpectedly, as she seeks parliamentary approval for a temporary reduction in the tax on food sales. Investor focus now shifts to the BOJ’s branch managers’ meeting on Thursday, where the central bank will release its quarterly regional economic report. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +12.09% at 32.73.
The Japanese August Leading Index stood at 118.0, weaker than expectations of 118.1.
China’s Shanghai Composite Index was closed today for the week-long National Day holiday. Mainland China’s financial markets will reopen tomorrow.
Pre-Market U.S. Stock Movers
Chip and AI infrastructure stocks slid in pre-market trading. Sandisk (SNDK) was down over -2%, while Micron Technology (MU) and Marvell Technology (MRVL) each fell more than -1%.
SpaceX (SPCX) slid over -2% in pre-market trading after the Financial Times reported that the company was seeking to raise $40 billion to purchase Nvidia chips.
Constellation Brands (STZ) fell more than -4% in pre-market trading after the company reported a decline in FQ2 beer depletions, a key gauge of consumer demand.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - October 7th
Levi Strauss & Co. (LEVI), Applied Digital (APLD), Richardson Electronics (RELL).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
Nasdaq Futures Slip as Rising Bond Yields Weigh on Chip Stocks, FOMC Minutes on Tap Stock Futures Climb as Oil and Bond Yields Fall; Fed Speak on Tap U.S. Stock Futures Muted as Europe’s Turmoil Curbs Risk Appetite; Fed Minutes Awaited FOMC Minutes, Interest Rates and Other Key Things to Watch this Week