US stock futures plunged on Thursday as another surge in oil prices and stubbornly high Treasury yields threatened to derail Wall Street’s record-setting run.
Dow futures crashed 482 points or 0.94%, while S&P 500 futures fell 0.57% and Nasdaq 100 futures lost around 0.83%.
The pressure comes after stocks retreated from record highs on Wednesday as investors began questioning whether strong AI earnings can continue to outweigh rising borrowing costs.
Brent crude traded above $104 at one stage, while the 10-year Treasury yield remained above 5.3%, leaving inflation, interest rates and expensive technology valuations firmly back in focus.
5 things to know before Wall Street opens
1. Oil jumps above $104 as Middle East supply risks intensify
Oil prices surged again Thursday as escalating Middle East tensions and disruptions in the Gulf revived fears over global energy supplies.
Brent crude climbed about 4% and traded above $104 a barrel at one stage, while West Texas Intermediate approached $92.
Markets are monitoring attacks on tankers and Saudi infrastructure, renewed tensions involving Iran and the threat of further disruption around the Strait of Hormuz.
A storm in the Gulf of Mexico has added another supply risk, forcing Shell and Chevron to halt some production.
2. Treasury yields stay above 5% as Waller keeps another Fed hike in play
Bond yields remain one of the biggest obstacles facing Wall Street.
The US 10-year Treasury yield was above 5.3%, while the 30-year remained above 5.7%, levels that make government bonds increasingly competitive with equities and put particular pressure on highly valued technology stocks.
Federal Reserve Governor Christopher Waller said Thursday that additional interest-rate increases would probably be needed to bring inflation back towards target, although policymakers have flexibility over how quickly they move.
3. TSMC delivers a $46.7B quarter but chip stocks still turn lower
The fundamental picture for artificial intelligence remains strong.
TSMC reported third-quarter revenue of NT$1.49 trillion, or about $46.7 billion, up 50% from a year earlier and above analysts’ estimate of roughly NT$1.46 trillion.
September sales jumped around 55%, offering another indication that demand for advanced processors used by Nvidia, AMD and other AI companies remains exceptionally strong.
Yet semiconductor shares struggled before the bell. Intel fell around 2% in early premarket trading, while Nvidia, AMD and other chip names also came under pressure.
4. Amazon cuts more corporate jobs
Amazon has confirmed another round of layoffs affecting fewer than 1,000 white-collar employees, primarily within its Stores business.
Workers in the US, India and UK were affected, with reductions hitting areas including customer service and selling-partner operations.
The timing is notable because the cuts came during Amazon’s Prime Big Deal Days promotion and follow a much larger restructuring that eliminated roughly 30,000 positions between last year and January.
5. PepsiCo cuts its profit-growth outlook
PepsiCo added another test for the consumer sector after reporting better-than-expected third-quarter results but lowering its profit-growth outlook.
Revenue rose 5.6% to $25.27 billion, beating Wall Street forecasts, while adjusted earnings also topped expectations.
However, weakness in North America and higher input costs prompted the company to cut its full-year core earnings-growth forecast.
PepsiCo shares were modestly higher in premarket trading following the results.
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