Key facts
- Oil prices advanced 3% to over $100 a barrel for the first time since July, driven by Russia's invasion of Ukraine and disrupted supply routes.
- The Producer Price Index (PPI) rose 5.4% in August on an annualized basis, exceeding economists' expectations.
- Two-year Treasury yields jumped to 4.490%, reflecting increased expectations of a Federal Reserve interest rate hike.
- Traders now see a 70% chance the Federal Reserve will hike interest rates by at least 25 basis points next week.
- Dow E-minis were down 171 points, S&P 500 E-minis were down 43 points, and Nasdaq 100 E-minis were down 360.25 points ahead of the open.
- The yield on the benchmark 10-year U.S. Treasury was at 4.901%, its highest since 2023.
Oil prices surged past $100 a barrel for the first time since July on Thursday, driven by Russia's invasion of Ukraine and concerns over disrupted supply routes through the Strait of Hormuz and the Red Sea. U.S. West Texas Intermediate crude also breached the $100 mark.
Wall Street's main indexes were set for a lower open as the escalating geopolitical tensions and a hotter-than-than-expected inflation report reinforced expectations of a Federal Reserve interest rate hike. The Labor Department reported that the Producer Price Index (PPI) rose 5.4% in August on an annualized basis, slightly higher than anticipated.
Two-year Treasury yields jumped to 4.490%, their highest level since 2024, as traders increased their bets on a Fed rate hike. The benchmark 10-year U.S. Treasury yield was at 4.901%, its highest since 2023, putting pressure on equities by making risk-free Treasuries relatively more attractive.