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The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to see further downside after ending the previous session well off their worst levels but still modestly lower.<\/p>\n
A renewed spike in crude oil prices is likely to weigh on Wall Street amid concerns about a re-escalation of the conflict in the Middle East.<\/p>\n
U.S. crude oil futures are spiking by nearly 5 percent on the day, while international benchmark Brent crude futures have soared back well above $100 a barrel.<\/p>\n
Crude oil prices are surging after a report from NBC News said President Donald Trump and his national security team have discussed possibly resuming large-scale U.S. military operations in Iran in the coming weeks.<\/p>\n
Citing a U.S. official and another person with knowledge of the discussions, NBC News said the talks included the option of launching strikes before the midterm elections next month<\/p>\n
A separate report from Axios said the Pentagon has instructed U.S. Central Command to be ready to resume major combat operations in Iran.<\/p>\n
Ongoing attacks on tankers in the Middle East and concerns about hurricane-related production disruption in the Gulf of Mexico have also driven crude oil prices higher.<\/p>\n
The jump in crude oil prices along with concerns about the outlook for interest rates have also contributed to a renewed advance by treasury yields, which ended the previous session little changed after an early surge.<\/p>\n
“The higher the oil price goes, the more volatility to expect on financial markets<\/span>,” said Dan Coatsworth, head of markets at AJ Bell. “Bond investors have made it clear they are concerned by the prospect of rising inflation feeding into higher interest rates and potentially economic setbacks.”<\/p>\n “Equity investors have been relatively relaxed versus bond investors thanks to positive corporate news flow keeping spirits high,” he added. “But that situation might not be sustainable if higher costs start to crimp corporate profits.”<\/p>\n After trending higher over the past several sessions, stocks saw an initial pullback on Wednesday but regained ground over the course of the trading day. The major averages climbed well off their lows of the session, although they still closed in negative territory.<\/p>\n The tech-heavy Nasdaq ended the day down 61.20 points or 0.2 percent to 27,538.69 after slumping by as much as 0.9 percent in early trading. The S&P 500 also dipped 17.16 points or 0.2 percent to 7,801.77, while the narrower Dow slid 341.41 points or 0.7 percent to 51,179.87.<\/p>\n The early weakness on Wall Street may partly have reflected profit taking following the recent strength, which came amid easing concerns about the Federal Reserve once again raising interest rates later this month.<\/p>\n The major averages had closed higher for four consecutive sessions, lifting the Nasdaq and S&P 500 to new record highs.<\/p>\n A rebound by treasury yields also weighed on stocks, with the yield on the benchmark ten-year bouncing back to its highest levels since 2002 following a pullback on Tuesday.<\/p>\n However, treasury yields showed a notable recovery attempt over the course of the session, easing the selling pressure on Wall Street.<\/p>\n Yields pulled back well off their highs of the session after the Treasury Department revealed this month’s auction of $39 billion worth of ten-year notes attracted well above average demand.<\/p>\n The recovery attempt on Wall Street also came amid a significant downturn by the price of crude oil, with U.S. crude oil futures tumbling by 1.3 percent after jumping by as much as 1.7 percent.<\/p>\n Meanwhile, traders largely shrugged the minutes of the Federal Reserve’s latest monetary policy meeting, which confirmed most officials expect to once again raise interest rates before the end of the year.<\/p>\n The Fed said, “Most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end.”<\/p>\n The minutes did not provide further insight about the timing of the rate hike and said officials emphasized “that they approached each meeting with an open mind and decisions at future meetings would depend on incoming information and its implications for the outlook and the balance of risks.”<\/p>\n Despite the recovery attempt by the broader markets, gold stocks continued to see substantial weakness amid a steep drop by the price of the precious metal.<\/p>\n Reflecting the weakness in the sector, the NYSE Arca Gold Bugs Index plunged by 3.5 percent to a two-month closing low.<\/p>\n Significant weakness also remained visible among brokerage stocks, with the NYSE Arca Broker\/Dealer Index tumbling by 2.6 percent.<\/p>\n Housing, oil service and airline stocks also saw considerable weakness, while pharmaceutical stocks showed a strong move to the upside.<\/p>\n Commodity, Currency Markets<\/b> <\/p>\n Crude oil futures are spiking $4.34 to $92.62 a barrel after tumbling $1.16 to $88.28 a barrel on Wednesday. Meanwhile, after slumping $46.40 to $4,140.70 an ounce in the previous session, gold futures are rising $13.40 to $4,154.10 an ounce.<\/p>\n On the currency front, the U.S. dollar is trading at 158.18 yen versus the 158.06 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1190 compared to yesterday’s $1.1195.<\/p>\n Asia<\/b><\/p>\n Asian stocks ended mostly lower on Thursday as technology<\/span> stocks retreated on concerns over a surge in AI-related corporate debt.<\/p>\n Concerns over rising bond yields and the outlook for monetary policy also weighed on markets as oil prices remained elevated in the wake of supply disruptions linked to the Iran conflict and attacks by Yemen’s Iran-backed Houthis on Saudi Arabia.<\/p>\n Gold edged up 0.3 percent to $4,124 an ounce as the dollar pulled back from an 18-month high in subdued trading.<\/p>\n Brent crude prices jumped nearly 4 percent toward $104 a barrel, reversing losses from the previous session after reports suggested that the White House has asked the Pentagon to develop options to strike Iran before the midterm elections, but no final decision has been made.<\/p>\n On Wednesday, oil prices rose on fresh concerns about Middle East supplies before falling after the International Energy Agency agreed to speed up a planned release of oil stocks and prioritize diesel in a bid to curb record-high fuel prices.<\/p>\n Seven commodity vessels passed through the Strait of Hormuz on Tuesday, the lowest figures since July 23 after attacks in the key waterway reached their highest last week since the start of the U.S-Israeli war with Iran, according to data from analytics firm Kpler.<\/p>\n The U.S. State Department urged citizens to exercise heightened vigilance after Houthi strikes on two Saudi airports killed three people and injured 36.<\/p>\n Mainland Chinese markets ended notably lower as trading resumed after the National Day Golden Week closure. The benchmark Shanghai Composite Index slid 0.8 percent to 3,811.90 amid renewed U.S.-China tensions on trade and technology restrictions.<\/p>\n Analysts said a U.S. plan to prevent Chinese laboratories from testing electronics devises for use in the American market could disrupt a key link in the global electronics supply chain.<\/p>\n Hong Kong’s Hang Seng Index slumped 1.4 percent to 23,785.79. Tencent Holdings shares fell 2.2 percent after Bloomberg reported that the technology giant is considering raising up to $5 billion via an offshore bond sale.<\/p>\n Japanese markets ended lower for a second consecutive session as oil prices surged amid renewed Middle East supply concerns. The Nikkei 225 Index tumbled 1.4 percent to 69,042.11, while the broader Topix Index settled 1.5 percent lower at 4,091.46.<\/p>\n Banking and semiconductor stocks succumbed to heavy selling pressure, with Mitsubishi UFJ Financial dropping 3.3 percent and SoftBank Group plummeting 4.3 percent.<\/p>\n Seoul stocks fell for a third consecutive session on inflation and interest-rate worries. The Kospi Index plunged 2.6 percent to 6,625.93.<\/p>\n Shares of Samsung Electronics fell 2.4 percent despite the company posting record profit as a result of surging memory chip prices and relentless spending on artificial-intelligence infrastructure.<\/p>\n Australian markets ended lower, with banks and technology stocks coming under selling pressure on bond market woes. The benchmark S&P\/ASX 200 Index fell 0.8 percent to 8,660.90, while the broader All Ordinaries Index closed 0.8 percent lower at 8,823.20.<\/p>\n Across the Tasman, New Zealand’s benchmark S&P\/NZX-50 Index finished marginally higher at 13,691.85, halting declines from the previous session.<\/p>\n Europe<\/b><\/p>\n European stocks have drifted lower on Thursday as a broad global bond sell-off and surging oil prices revived inflation and interest rate worries.<\/p>\n Brent crude futures topped $104 a barrel after reports suggested that the White House asked the Pentagon to draw up strike options against Iran that could be executed before the midterm elections.<\/p>\n U.S. Treasury yields surged back toward multi-decade highs, with yields on 10-year and 30-year Treasury notes trading near 5.32 percent and 5.71 percent, respectively, after the minutes of the Federal Reserve’s September monetary policy meeting showed unanimous support for another interest rate hike by the end of this year.<\/p>\n Investors were also reacting to downbeat data that showed German exports unexpectedly declined in August.<\/p>\n Exports dropped 0.8 percent on a monthly basis following a 0.5 percent decrease in July, while imports rose 0.9 percent, reversing a fall of 5.5 percent in July, Destatis reported.<\/p>\n The German DAX Index is down by 0.9 percent, the French CAC 40 Index is down by 0.4 percent and the U.K.’s FTSE 100 Index is down by 0.1 percent.<\/p>\n Banks traded lower, with Commerzbank, BNP Paribas and Lloyds Bank slumping, as Euro zone bond yields climbed towards their recent peaks.<\/p>\n Argenx shares have plummeted. The Belgian-Dutch pharmaceutical company specializing in immunology said it had stopped its Phase 3 UNITY study testing efgartigimod SC in adults with moderate-to-severe Sjogren’s disease.<\/p>\n Bayer has also dropped. The German pharmaceutical and biotechnology firm announced that the U.S. FDA has accepted its supplemental New Drug Application for KERENDIA.<\/p>\n Telecoms group Vodafone has also moved to the downside after lifting the cost-saving target for its merged U.K. business<\/span>.<\/p>\n Meanwhile, energy giants BP Plc, Shell and TotalEnergies have risen as Brent crude prices jumped nearly 4 percent on heightened concerns of U.S.-Iran war escalation.<\/p>\n Edinburgh investment company Aberdeen has also advanced as it announced plans to reduce its stake in insurer Standard Life to 5.2 percent from the current 10.3 percent. Shares of the latter slumped.<\/p>\n Supermarket group Tesco has also jumped after issuing slightly improved profit outlook and increasing the size of its share buyback program.<\/p>\n Imperial Brands has also rallied. The tobacco maker reaffirmed its full-year guidance and announced plans to buy back 1.5 billion pounds in shares in fiscal 2027.<\/p>\n Denmark-based biotechnology company Bavarian Nordia has also moved sharply higher after raising its full-year guidance.<\/p>\n U.S. Economic News<\/b><\/p>\n The Labor Department released a report on Thursday showing first-time claims for U.S. unemployment benefits unexpectedly dipped from an upwardly revised level in the week ended October 3rd.<\/p>\n The report said initial jobless claims edged down to 197,000, a decrease of 2,000 from the previous week’s revised level of 199,000.<\/p>\n Economists had expected jobless claims to rise to 200,000 from the 197,000 originally reported for the previous week. <\/p>\n The Labor Department said the less volatile four-week moving average also slipped to 198,000, a decrease of 2,500 from the previous week’s revised average of 200,500.<\/p>\n At 10:40 am ET, Minneapolis Federal Reserve President Neel Kashkari is scheduled to participate in a conversation before a virtual 2026 Institute Research Conference.<\/p>\n The Treasury Department is due to announce the results of this month’s auction of $22 billion worth of thirty-year bonds at 1 pm ET.<\/p>\n At 1:40 pm ET, St. Louis Federal Reserve President Alberto Musalem is scheduled to speak on the U.S. economy<\/span> and monetary policy before “The Future of Fixed Income” Bloomberg event. <\/p>\n<\/p>\n<\/div>\n