Global equities fell on Tuesday as Brent crude approached $100 a barrel, reinforcing expectations that central banks may need to raise rates to curb inflation. According to Sina Finance, the yen also climbed to its highest level since February.
As of the report, Dow futures were down 0.81%, S&P 500 futures fell 0.25%, and Nasdaq futures rose 0.07%. European and Asian stocks also weakened, with the pan-European STOXX 600 down 0.4%.
Chip stocks were relatively strong in premarket trading. HSBC's Willem Sells said U.S. equity valuations still do not fully reflect the productivity gains and earnings growth potential from artificial intelligence. Morningstar Wealth senior portfolio manager Mark Preskett said some large AI companies have reported very strong results, but market reactions have generally been muted outside Nvidia.
Middle East tensions intensified after Iran-backed Houthi forces attacked energy facilities and cities in Saudi Arabia, pushing Brent crude above $98 a barrel. China’s strong crude purchases also added to supply tightness.
Investors are also watching Friday's U.S. inflation data, which could help determine whether the Federal Reserve raises rates this month or leaves them unchanged. Money markets currently price in about a 58% chance of a Fed rate hike.
The U.S. Treasury will announce the maximum amount of 10-year to 20-year Treasuries it plans to buy back at 11:00 a.m. U.S. Eastern Time on Wednesday, or 23:00 (UTC+8).