Dow Jones drops 500 points as oil and bond yields rise
U.S. stock futures declined significantly at the start of trading, with the Dow Jones Industrial Average dropping around 510 points, roughly 1%. This came amid rising yields on 10- and 30-year U.S. Treasury bonds—levels not seen in decades—following comments from Federal Reserve officials regarding the possible continuation of interest rate hikes to combat inflation. Oil prices also surged sharply, with Brent crude rising to $105.33 and West Texas Intermediate (WTI) reaching $92.71, amid escalating geopolitical tensions and high energy costs that could sustain inflation. Despite these pressures, investors expect the stock market to remain strong, buoyed by expectations of robust corporate earnings, especially as the S&P 500 shows a 30% growth in profits during the third quarter.
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