US stock futures fell on Tuesday as a fresh bond-market sell-off and oil above $90 revived the inflation risk investors had hoped was fading.
Nasdaq 100 futures were down 1.17% at 4:50 am ET, S&P 500 futures lost 0.55% and Dow futures slipped 0.15%.
Technology and semiconductor shares led the decline after the 30-year Treasury yield climbed to its highest since 2007.
The S&P 500 had already fallen 0.52% on Monday, leaving Wall Street caught between softer economic data and another rise in long-term borrowing costs.
5 things to know before market opens
1. Nasdaq futures lead as the yield shock hits technology
The pressure is concentrated in the market’s most rate-sensitive shares. Nvidia and Tesla fell more than 1% premarket, while Micron, Marvell, AMD and Intel dropped between 2.6% and 4.8%.
SanDisk and Western Digital lost more than 5%.
Higher bond yields are particularly uncomfortable for growth companies because they reduce the present value investors assign to future profits, while increasing financing costs for the enormous AI infrastructure build-out.
2. The 30-year Treasury yield hits a 19-year high
The 30-year Treasury yield reached 5.327%, its highest since 2007, while the benchmark 10-year climbed to 4.739%.
The sell-off extends beyond expectations for Fed policy. OCBC strategist Vasu Menon sees heavy borrowing by AI hyperscalers, rising US deficits and greater policy uncertainty as increasing competition for capital and pushing longer-term yields higher.
The bond-market move is effectively tightening financial conditions even without another immediate Fed increase.
3. Brent above $91 threatens the softer-inflation story
Oil is the biggest macro complication. Brent moved above $91 after the temporary US-Iran ceasefire expired without a permanent agreement, while Tehran signalled a more aggressive military posture and Washington ruled out extending the arrangement.
Disruption around the Strait of Hormuz remains a key supply concern.
If crude stays above $90, the resulting pressure on fuel and transport costs could make recent improvements in US inflation harder to sustain.
4. Home Depot beats estimates in an early consumer test
Home Depot has already delivered one brighter signal before the bell.
Second-quarter sales rose to $47.86 billion, above the roughly $47.27 billion expected, while adjusted earnings reached $4.92 a share versus the $4.73 consensus.
US comparable sales increased 1.3%, helped by demand for smaller repair projects. The retailer maintained its annual outlook despite the difficult housing market.
Walmart reports Thursday, providing the next major read on household spending.
5. Fed minutes and Nvidia earnings loom over the next move
Markets have reduced expectations for a September Fed increase after softer inflation and retail data, although futures still imply a very high probability of at least one quarter-point hike before year-end.
Minutes from the Fed’s July meeting arrive Wednesday, followed by Chair Kevin Warsh’s Jackson Hole appearance next week.
Nvidia also reports next week, giving the AI trade another test as rising yields challenge the valuations that helped drive stocks to records earlier this month.
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