US STOCKS-Futures fall as high oil prices stoke inflation worries; Tesla falls
Fears of aggressive interest rate hikes by the Federal Reserve have returned to the forefront after a report on Wednesday showed strong U.S. labor demand. Rate-sensitive growth stocks fell as the yields on the 10-year Treasury note rose for the second day.
- United States
U.S. stock index futures fell on Thursday as rising oil prices exacerbated inflation worries, while high-growth stock Tesla fell on worries over funding for Elon Musk's proposed buyout of Twitter. Fears of aggressive interest rate hikes by the Federal Reserve have returned to the forefront after a report on Wednesday showed strong U.S. labor demand.
Rate-sensitive growth stocks fell as the yields on the 10-year Treasury note rose for the second day. Twitter Inc, Nvidia Corp and Microsoft Corp were down between 0.7% to 1.2% in premarket trading. Tesla Inc slipped 1.1% after Apollo Global Management Inc and Sixth Street Partners, which had been looking to provide financing for Musk's $44 billion Twitter deal, are no longer in talks with the billionaire.
Meanwhile, oil prices held near three-week highs after the OPEC+ group of nations' largest supply cut since 2020 ahead of European Union embargoes on Russian energy is set to tighten global oil supply. This comes a day after data showed increased monthly hiring by private employers in America and a rise in ISM's services industry employment gauge, suggesting the Fed will keep interest rates higher for longer.
Money markets are pricing in a more than 80% chance of a fourth straight 75-basis-point rate hike at the upcoming Fed meet on November 1-2. After Fed's San Francisco President Mary Daly on Wednesday underscored the central bank's commitment to curb inflation with more interest rate hikes, other officials including Cleveland President Loretta Mester, Fed Board Governor Lisa Cook, Board Governor Christopher Waller and Chicago President Charles Evans will be on the watch-list.
An initial jobless report is due at 8:30 a.m. ET, where in 203,000 Americans are expected to have filed for unemployment claims for the week-ended Oct. 1, rising by 10,000 from the previous week. Growing fears of a looming recession in corporate leadership is expected to weigh on capital spending and job openings, Goldman Sachs said in a note.
At 6:39 a.m. ET, Dow e-minis were down 172 points, or 0.57%, S&P 500 e-minis were down 25.25 points, or 0.67%, and Nasdaq 100 e-minis were down 79.75 points, or 0.69%.
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