U.S. stock futures pointed to a stronger opening on Wednesday, suggesting Wall Street could recover some of its recent losses as crude oil prices and Treasury yields pulled back.
Futures gained momentum as U.S. crude reversed course after advancing strongly during the previous three sessions. Oil futures slipped into negative territory after earlier climbing as much as 1.3% to their highest level in almost three weeks.
Treasury Buyback Expansion Pushes Yields Lower
Equities also received support from a sharp decline in Treasury yields following an announcement from the U.S. Treasury Department regarding its longer-term debt buyback programme.
The department said liquidity-support buyback operations for longer-dated nominal coupon securities will at least double in size from September 9.
However, buying appetite could remain restrained ahead of the release of minutes from the Federal Reserve’s latest monetary policy meeting, which investors will examine for further indications about the outlook for interest rates.
Wall Street Extends Losing Streak
The potential rebound follows another negative session on Tuesday, when U.S. equities extended losses from the previous two trading days. Technology stocks were particularly weak, weighing heavily on the Nasdaq.
The Nasdaq dropped 355.20 points, or 1.3%, to 26,289.71, while the S&P 500 declined 53.30 points, or 0.7%, to 7,691.76. The Dow Jones Industrial Average fell 116.38 points, or 0.2%, to close at 53,343.40.
Recent weakness has been partly driven by rising bond yields, with the 30-year Treasury yield briefly reaching its highest level in nearly two decades before retreating.
Inflation and Middle East Risks Remain in Focus
Treasury yields have faced upward pressure amid persistent concerns that the Middle East conflict could keep inflation elevated.
Crude prices had also rallied following comments from President Donald Trump that no talks between the United States and Iran were currently taking place or scheduled.
Trump also claimed in a post on Truth Social that the Strait of Hormuz is “open and operating” and “all water mines have been removed or detonated,” although reports indicated that traffic through the strategically important waterway remained restricted.
Daniela Hathorn, Senior Market Analyst at Capital.com, said the rise in Treasury yields had occurred “despite softer recent economic data reducing expectations for an imminent Fed hike.”
“Instead, the long end is responding to persistent inflation risks, heavy government borrowing and growing competition for capital—including debt issuance associated with the AI investment boom,” Hathorn said.
She added, “That creates an uncomfortable environment for equities because financial conditions can tighten even without the Fed raising rates.”
U.S. Industrial Production Misses Forecast
Fresh economic data showed U.S. industrial production increased slightly less than economists had anticipated in July.
The Federal Reserve reported a 0.2% monthly increase following an upwardly revised 0.3% gain in June. Economists had expected July production to rise 0.3%, compared with the initially reported 0.1% increase for June.
Semiconductor Stocks Lead Tuesday’s Decline
Technology shares were among the biggest casualties of Tuesday’s sell-off. Semiconductor stocks fell sharply, sending the Philadelphia Semiconductor Index down 5%.
Networking and computer hardware companies also suffered sizeable losses, contributing to the Nasdaq’s underperformance.
Gold miners declined alongside bullion prices, pushing the NYSE Arca Gold Bugs Index down 2.9%. Airlines, housing and steel stocks also weakened.
Pharmaceutical, healthcare and energy shares bucked the broader trend, recording notable gains during the session.