U.S. stock futures slip as yields, oil surge pressure equities

Traders Union
All News
Financial News
US futures slip on yields, oil

Highlights

U.S. equity futures decline with Dow E-minis down 313 points (0.63%) as 10-year Treasury yield hits 4.631% and Brent crude surges to $110.21 per barrel.
Traders price over 40% chance of a U.S. Federal Reserve rate hike in January after hotter inflation data and a bond selloff, shifting focus to Fed meeting minutes Wednesday.
Dominion Energy jumps 11.2% premarket on NextEra Energy deal talks valuing it at about $76 per share, while UnitedHealth Group falls 5.9% as Berkshire Hathaway reduces its holding.

Market pressures build before key earnings

As reported by Reuters, benchmark U.S. equity futures are trading lower on Monday after a bond selloff lifted the 10-year Treasury yield as high as 4.631%, its highest level since February 2025, before it eases to 4.597%. The retreat in futures coincides with a sharp rise in energy prices, with Brent crude trading at $110.21 a barrel after efforts to end the Iran war appear to stall following a drone strike on a nuclear power plant in the United Arab Emirates.

Lale Akoner, global market strategist at eToro, says higher yields can spill over from bond markets into equities, weighing especially on growth and technology valuations while also increasing pressure on heavily indebted governments. The market shift follows a strong rally in recent weeks that takes the S&P 500 and Nasdaq to record highs as enthusiasm around artificial intelligence helps investors look past inflation risks tied to higher oil prices.

That sentiment weakens after Friday's bond market rout, and traders are now pricing in a more than 40% chance that the U.S. Federal Reserve will raise interest rates in January, according to CME's FedWatch tool, after hotter-than-expected inflation data last week. At 05:47 a.m. ET, Dow E-minis are down 313 points, or 0.63%, S&P 500 E-minis lose 21.5 points, or 0.29%, and Nasdaq 100 E-minis shed 27.75 points, or 0.09%.

Fed signals and company results in focus

Minutes from the Federal Reserve's latest policy meeting, due on Wednesday, are expected to offer further signals on how much pressure there is within the committee to move toward a neutral stance and away from an easing bias. Corporate earnings are also becoming a central test for markets as investors gauge whether elevated valuations can withstand tighter financial conditions.

Nvidia, now the world's most valuable company, is scheduled to report on Wednesday as the first-quarter earnings season nears its end. Expectations remain high after the stock rises 36% from a March low, while the Philadelphia SE Semiconductor Index surges more than 60% on strong demand for AI-related chips.

Walmart is also due to report this week, and its results may provide a clearer view of how U.S. consumers are managing higher energy costs and broader inflation pressures. In premarket trading, Dominion Energy jumps 11.2% after Bloomberg News reports that NextEra Energy is discussing a mostly stock deal for the utility that would value it at about $76 per share, or around $66 billion, while UnitedHealth Group falls 5.9% after Berkshire Hathaway says it has sold many of its smaller stock holdings, including its position in the health insurer.

In our earlier article on U.S. crude market volatility, we explained how escalating Middle East tensions were pushing WTI above $105 as traders priced in a growing geopolitical risk premium and potential supply disruptions through the Strait of Hormuz. We also noted that tighter OPEC+ output management, falling inventories, and persistent inflation concerns were keeping the market tight even as demand growth showed signs of slowing.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.