US stock futures pointed to a lower open on Wednesday, with the Dow Jones Industrial Average futures shedding more than 300 points (0.5%) as Brent crude briefly surpassed $100 a barrel for the first time since July. The S&P 500 and Nasdaq 100 futures each slipped about 0.2%, reflecting a market caught between renewed inflation worries and resilient tech sentiment.
The move came after an escalation in the US-Iran conflict and fresh attacks on Gulf energy infrastructure, pushing oil prices higher and lifting Treasury yields. The 10-year Treasury yield hovered near 4.8%, close to its highest level since 2023, as investors weighed the risk of prolonged higher interest rates against strength in AI-linked shares.
Oil crosses $100, but stocks show resilience
Brent crude broke above $100 a barrel for the first time since July, while West Texas Intermediate (WTI) climbed above $94. Despite the oil shock, Wall Street futures were only modestly lower, suggesting investors are not yet treating $100 oil as an economy-breaking event. This disconnect is a key signal for markets, as higher energy costs could feed into inflation and complicate the Federal Reserve's policy path.
Investors are now balancing the risk of higher-for-longer rates against the momentum in AI-related equities. Thursday's Producer Price Index (PPI), Friday's Consumer Price Index (CPI), and a Treasury buyback announcement are set to shape sentiment before next week's Fed decision.
Apple's product event in focus
Apple takes center stage at 1 pm ET with its first major product event under new CEO John Ternus. The company is widely expected to unveil its first foldable iPhone alongside new premium iPhone 18 models. Investors will be watching pricing closely, with Morgan Stanley anticipating unusually broad iPhone price increases and the foldable device potentially costing more than $2,000. Apple shares were roughly flat before the bell after falling about 1% on Tuesday.
Treasury buyback announcement
Before Apple's event, bond traders have a key deadline at 11 am ET, when the US Treasury is expected to disclose the size of an expanded program to buy back longer-dated government debt. The Treasury previously capped individual purchases at $2 billion and has promised to at least double that amount, leaving markets looking for a figure of $4 billion or more. A larger-than-expected buyback could ease long-term yields and support expensive growth stocks, while a disappointing number could reinforce pressure from rising oil prices.
AI stocks remain a bright spot
Technology is providing an unusual cushion against the oil shock. Qualcomm rose about 1.4% before the bell after gaining 3.2% on Tuesday on optimism surrounding its Amazon agreement. Corning and SanDisk also advanced, even as AMD and Intel traded lower. This resilience highlights how investors are still willing to overlook the broader macro environment in favor of AI-related opportunities. However, the debate intensifies over whether increasingly intertwined deals between AI companies will translate into genuine outside revenue, especially as valuations rise.
Earnings reactions are brutal
Wednesday's individual-stock tape is notably active. Casey's General Stores sank about 8% despite beating quarterly expectations, reflecting the high bar set by its roughly 33% year-to-date rally. Braze dropped about 12% even after topping second-quarter estimates, as investors sought clearer evidence that AI was accelerating revenue. ServiceTitan plunged around 18% after weaker guidance overshadowed an earnings beat. Chewy is also due to report results, offering another read on consumer demand.
As markets digest these developments, the interplay between oil prices, inflation data, and corporate earnings will likely dictate near-term direction. For more context on recent market moves, see our coverage of oil nearing $100 and inflation data and stocks shrugging off oil and Fed worries.
This article is for informational purposes only and does not constitute financial advice.
