U.S. equity futures moved lower on Tuesday, with traders positioning ahead of Wednesday’s Federal Reserve rate announcement. Rising Treasury yields, firm oil prices and renewed caution around artificial intelligence stocks added pressure across major index futures.
At 4:33 p.m. (Bangkok time), Dow Jones Industrial Average futures showed the steepest decline, down 0.72%. Contracts tied to the Nasdaq-100 and S&P 500 each slipped 0.67% and 0.58%, respectively.
The pullback followed a weaker Monday session on Wall Street. The Dow fell 152.09 points, or 0.29%, while the S&P 500 dropped 0.48% and the Nasdaq Composite ended 0.56% lower.
Bond-market moves remained a central concern for equity investors. The 10-year Treasury yield climbed 8 basis points to 5.041% by 4:02 a.m. (Eastern time), reaching its strongest level since 2007.
Government debt markets globally have drawn increased attention in recent weeks as selling pressure intensified. Investor concerns have centered on the U.S.-Iran war, with fears that the conflict could stoke inflation and encourage central banks to maintain a more aggressive policy stance.
Energy markets remained another focus for traders. Brent crude climbed 2.53% to $108.35 a barrel on Tuesday, while WTI crude rose 2.61% to $104.04. Oil has stayed high after Saudi Arabia closed its East-West pipeline and Iranian-backed Houthi forces carried out new attacks in the Middle East.
Against that backdrop, market participants are preparing for the Fed’s next policy move. Fed funds futures indicated about a 92% probability that policymakers will raise interest rates by 25 basis points from the current 3.5% to 3.75% target range.
The Federal Open Market Committee is due to open its September meeting Tuesday. Investors will also review the updated interest-rate projections, known as the dot plot, and comments from Fed Chairman Kevin Warsh for signals on the central bank’s policy direction.
Technology sentiment also remained under pressure after weakness in AI-linked shares. Anthropic CEO Dario Amodei urged a more restrained approach to AI development, while OpenAI CEO Sam Altman said over the weekend that the company would not pursue an initial public offering this year, citing increased concerns about AI safety.
