US stock index futures slipped on Tuesday, with oil holding near recent highs and government bond yields hitting multi-year peaks as chances of a peace deal between the US and Iran waned. Iran's shift to a 'fully offensive' military posture and the US ruling out extending a temporary ceasefire agreement have rekindled inflation concerns.
Market Impact
The developments pushed Brent crude futures up 0.4%, setting them on track for a third straight session of gains. Heavyweight technology stocks came under pressure as high government bond yields potentially lower the present value of future tech profits and increase corporate borrowing costs. Tesla and Nvidia led losses among growth stocks, falling more than 1% each in premarket trading.
Economic Outlook
The yield on the 30-year Treasury bond stood at its highest since 2007, while that of the benchmark 10-year maturity held near its highest level since January 2025. The CBOE Volatility Index jumped to its highest in about two weeks. At 04:50 a.m. ET, Dow E-minis were down 79 points, or 0.15%, S&P 500 E-minis were down 42.75 points, or 0.55%, and Nasdaq 100 E-minis were down 351.5 points, or 1.17%.
Upcoming Events
Minutes from the Federal Reserve’s July meeting due on Wednesday could offer more clues about how the central bank is assessing the current environment. Markets will also closely parse Fed Chair Kevin Warsh’s speech at the Jackson Hole symposium next week.