U.S. stock futures muted as oil nears $100, Fed hike bets rise

U.S. stock futures hovered near unchanged Tuesday evening after Wall Street closed lower, with oil prices approaching $100 a barrel and investors positioning for inflation data that could reinforce expectations that the Federal Reserve will raise interest rates this month.

S&P 500 futures were broadly steady at 7,679.25 points, while Nasdaq 100 futures held at 29,534.0 points as of 20:55 ET (00:55 GMT). Dow Jones futures edged down 0.1% to 52,800.0 points.

The cautious tone followed broad losses in Tuesday's regular session, with the Dow Jones Industrial Average falling 1.2%, the S&P 500 dropping 0.6% and the Nasdaq Composite losing 0.3%.

Oil remained one of investors' biggest concerns. Brent crude climbed as high as $99.67 a barrel in Asian trading Wednesday after Iran-backed Houthi militants attacked Saudi energy facilities, while U.S. forces hit multiple Iranian oil tankers and Iran targeted a U.S. base in Jordan.

The surge revived worries that higher energy costs could maintain elevated inflation and make it harder for central banks to ease policy.

The rise in crude also pushed Treasury yields higher. The benchmark 10-year U.S. Treasury yield briefly moved above 4.8% on Tuesday, near its highest level since November 2023, enhancing the relative appeal of bonds and lifting borrowing costs for companies and consumers.

Market attention is now centered on U.S. inflation data due later this week, with Friday's consumer price index report expected to provide fresh clues about the Federal Reserve's policy path.

Investors have sharply raised bets on a September rate hike as inflation concerns have returned. Markets were pricing roughly a 68% probability of a 25-basis-point Fed hike at the September meeting earlier in the month, up from about 40% a week earlier, according to CME FedWatch.

The Fed is scheduled to meet September 16-17, leaving markets highly sensitive to incoming inflation figures as policymakers weigh persistent price pressures against economic growth risks.