Wall Street futures indicate for a gap down opening on Thursday as yields and oil prices soar

US markets are set to open in deep red as a rebound in crude oil prices and bond yields hurts investor sentiment. The Dow Jones futures fell over 500 points, while the NASDAQ 100 and the S&P 500 futures fell nearly 1%. The elevated crude oil prices and multi-decade high bond yields have instilled fears of sticky inflation and higher-for-longer interest rates.

Part of the sourness is also carried forward from Wednesday, after the Federal Reserve released the minutes of the FOMC meeting. To tackle inflation and considering the elevated crude oil prices, the Federal Reserve has indicated one more rate hike this year, with more tightening next year, to be decided on the data.

Meanwhile, the Asian market indices ended in the red zone as investors focused on the rebound in crude oil prices, elevated yields in fixed income assets, and the weak performance of Wall Street in the previous market session.

MarketWatch data showed that Japan’s Nikkei 225 ended 1.42% lower, Hang Seng ended 1.4% lower, China’s Shanghai Composite closed 0.79% lower, India's SENSEX closed 1.44% lower, South Korea’s KOSPI ended 2.6% lower, and Singapore’s FTSE ended 3.49% lower.

Oil jumps above $105/barrel

Global crude oil prices rallied 5.2% during the trading session on Thursday to hit an intraday high of $105.47 per barrel as investors focused on the latest reports around a tanker being attacked off the coast of Qatar.

Investing.com data showed that the benchmark Brent crude oil prices were trading 4.5% higher at $104.73 per bbl as of 5:37 pm (IST), in comparison to $100.2 per bbl at the previous commodity market close.

According to a Guardian report citing the British maritime agency, a vessel was reportedly attacked by “multiple projectiles” off the north coast of Qatar, causing an unknown number of casualties amid Iran’s disclosure to close a route in the Strait of Hormuz.

Earlier, a media report from Reuters showed that the United States has set new demands for the Iran deal, with US Vice President JD Vance calling for a “meaningful” reduction in uranium enrichment capacity in Iran to potentially end the conflict in West Asia.

Treasury yields at 5.33%

US benchmark 10-year Treasury yields rebounded to 5.33% after easing for a couple of sessions, nearing their multi-year high as investors focus on the attractiveness of fixed income assets amid the global market uncertainty.

Latest reports from CNBC showed that US Federal Reserve Governor Christopher Waller on Thursday said that more rate hikes are needed to bring inflation down after the rates have remained above the 2% target for around 5 years.

How did US markets end on Wednesday?

The US benchmark indices ended lower after the trading session on Wednesday, October 7, as investors focused on weak global cues, elevated US Treasury yields, and rising oil prices to $102 per barrel levels.

MarketWatch data showed that the Dow Jones Industrial Average ended 0.66% lower at 51,179.87 points after the trading session on October 7, in comparison to 51,521.28 points at the previous US stock market close.

The S&P 500 index closed 0.22% lower at 7,801.77 points after Wednesday’s trading session, compared to 7,818,93 points at the previous market close.

The tech-heavy Nasdaq 100 also ended 0.21% lower at 31,160.08 points after the market session on October 7, in contrast to 31,224.69 points at the previous Wall Street close, as per the exchange data.