Wall Street wakes up to oil, bombs and bond-market drama
Ahead of the bell
Good morning. If you were hoping for a quiet Tuesday, the futures screen has other ideas.
US stock futures are pointing lower, with the Nasdaq-100 leading the retreat, down 1% ahead of the bell. The S&P 500 is off 0.4%, while the Dow is clinging to the flatline like a commuter who missed the last carriage.
The culprit, once again, is the Middle East. President Trump has vowed fresh economic pain for Iran and, in a line you don’t see on many trading desks, threatened to “bomb” Oman if it gets in the way of America’s plans for the Strait of Hormuz.
Oil took the hint. Brent has climbed to $91 a barrel and West Texas Intermediate to $84, their highest in a fortnight, just as the US Strategic Petroleum Reserve drains to a level last seen when Reagan was in the White House.
Pricier crude means the inflation ghost is back, and bonds are rattled. The 10-year Treasury yield has pushed up to 4.72%, while the 30-year sits at 5.31%, a 19-year high, egged on by heavy government borrowing and Silicon Valley’s insatiable appetite for AI funding.
There is a sliver of cheer. Home Depot rose 1% pre-market after shoppers plumped for smaller summer projects, and Toll Brothers and Klarna are still to report.
