US stock futures saw a mixed performance, with those for the Dow Jones Industrial Average and S&P 500 up less than 0.1% before the bell, and Nasdaq futures rising 0.3%. This drift follows a significant AI-driven rally on Monday, which saw major indexes advance, with the Nasdaq reaching a record high. The market's subdued activity is partly due to the absence of major corporate earnings or government economic data releases.
Oil prices continued their retreat for the fifth consecutive day, offering some relief to the market. The price for a barrel of U.S. crude fell $2.38, dipping below $90 for the first time this month, while Brent crude, the international standard, slid $2.05 to $98.29 per barrel. This decline in oil prices has helped alleviate pressure from rising bond yields, with the 10-year Treasury yield easing further to 4.93% after crossing above the 5% threshold last week. Reports that Saudi Arabia is working to reopen its east-west pipeline, damaged in recent attacks, contributed to the decline in oil prices.
Despite the easing of bond yields and oil prices, investors remain cautious regarding the interest-rate outlook. The Federal Reserve's recent rate hike, the first in three years, in response to inflation, has led to market expectations of a 50% chance of another hike next month, according to CME's FedWatch. This uncertainty about future interest rate movements continues to influence investor sentiment.
