US stock futures are pointing to a lower open on Thursday, with the Nasdaq 100 futures down 0.59% following a 5% surge in oil prices and rising Treasury yields. The Dow futures and S&P 500 futures are also in the red, down 0.66% and 0.34% respectively. European markets are similarly under pressure, with the DAX falling 0.76% and the FTSE 100 down 0.06%.
The drop in stocks comes as oil prices climb on supply concerns, with Brent crude rising above $105 per barrel due to attacks on tankers in the Strait of Hormuz and potential US military action against Iran. Meanwhile, the 10-year Treasury yield has reached 5.34%, its highest level since 2002, fueled by hawkish Federal Reserve minutes and inflation fears. The Fed's latest meeting showed unanimous support for a rate hike, with further increases likely before year-end.
Technology and energy sectors are expected to lead earnings growth, with S&P 500 profits projected to rise 30.6%. However, elevated yields are dampening demand for risk assets, pulling the Nasdaq and S&P 500 back from recent highs. Corporate movers include Wolfspeed, which jumped 15% after securing a $1.5 billion loan, and Broadcom, down 2% amid reports of a $50 billion financing deal for AI chips.
The US dollar is near an 18-month high, supported by rising Treasury yields and inflation risks. In Europe, the euro is weakening as debt concerns and higher bond yields weigh on the currency. The British pound is testing 1.32 against the dollar, despite expectations of a Bank of England rate hike in November.