U.S. stock futures fell in early European trade as the global oil benchmark topped $98 a barrel after another night of escalating tensions in the Gulf.
Event Context
In equity markets, investors met earnings from Alphabet and Tesla with concern, selling both stocks in after-hours trade over worries about the scale of their spending on artificial intelligence. Nasdaq futures were lower, though the increase in spending supported shares in some chip makers.
—U.S. Treasury yields across maturities are trading at or near multimonth highs in Asian trade, only marginally higher on the day, as oil prices continued rising. The two-year Treasury yield rose to 4.309% before edging back to 4.307%, staying close to Wednesday’s 4.311%, the highest level since February 2025. The 10-year Treasury yield matched Wednesday’s two-month high of 4.665% before retreating to 4.659%; and the 30-year yield is just off Wednesday’s two-month high of 5.154%, last trading at 5.150%.
—Eurozone government bond yields edged higher in opening trade. Ahead of the ECB’s rate decision, “markets will be very attentive to clues for September, which features updated forecasts,” analysts at KBC Bank said in a note. The 10-year Bund yield rose 0.9 basis points to 3.187%.
—Bitcoin fell 0.3% to $65,673.
Match Outlook
Blackstone and Intel are among companies posting earnings Thursday, while the European Central Bank will announce its latest policy rate, which investors expect to remain unchanged. Focus will fall on ECB chief Christine Lagarde’s subsequent press conference amid speculation around her future.
—In early trading, Brent crude climbed 4.6% to $98.39 a barrel, while WTI futures rose 3.4% to $89.75 a barrel. “The U.S.-Iran conflict has shown no sign of easing, and there’s still no indication of any emerging peace deal either,” analysts at Deutsche Bank said. Traffic through the Strait of Hormuz has fallen sharply from June levels, while Kpler ship-tracking data show some vessels have rerouted to avoid the Red Sea after the Houthis announced a maritime blockade against Saudi Arabia, heightening concerns over longer shipping times, higher freight costs and the risk of tighter global oil supplies if the conflict escalates further.
—U.S. futures for the S&P 500 were down 0.5% while the Dow Jones Industrial Average declined 0.55%. Nasdaq futures slid 0.7%. Alphabet and Tesla shares fell 3.1% and 4.6% after-hours, respectively, after the pair posted earnings after market close Wednesday.
—Alphabet and Tesla’s capital expenditure lift broadly helped Asian stocks. Hong Kong’s Hang Seng Index rose 1.1% and South Korea’s Kospi jumped 4.4%. China’s Shanghai Composite Index was 0.25% higher.
—European indexes fell in opening trade, as consumer stocks that had rallied in the last session handed back some gains. Tech continued to falter, as the Europe-wide Stoxx 600 fell 0.7%. STMicroelectronics tumbled over 15% after earnings, dragging indexes in France and Italy. Italy’s FTSE MIB was 1.4% lower, while the CAC 40 was 0.9% lower in Paris as luxuries extend recent falls. LVMH was down 1.9%. The German DAX fell 0.8%, with chip maker Infineon falling 5.6%. London’s FTSE 100 was 0.4% lower as pharmaceutical stocks fell, with GSK losing 2.3% and AstraZeneca down 1.8%. AI-related stocks dragged the Dutch AEX, which fell 0.8%. BE Semiconductor fell 3.1% after earnings.
—The dollar eased in the absence of fresh catalysts to propel the currency higher. The DXY dollar index fell 0.1% to 101.009, having reached a one-week high of 101.210 Tuesday.
—Gold prices fell after reaching a two-week high on Wednesday, as escalating Middle East tensions fueled interest-rate hike expectations. In early trading, gold futures in New York were down 1% to $4,110.30 a troy ounce, after rising in the previous session as dip-buyers emerged despite firmer U.S. yields.
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