Stock futures climbed and 10-year Treasury yields held close to multiyear highs, as oil prices pulled back on signs that Gulf countries are managing to export significant oil volumes out of the region.
Market moves were limited as investors look to position ahead of crucial inflation and jobs data from the U.S. later this week. Treasurys continued to struggle, though yields pulled back as oil prices pared gains. Ten-year Treasurys fell 2.6 basis points but held close to 5.220%, while 30-year yields traded around 5.542%. The dollar continued to strengthen in line with Treasury yields.
"Higher oil is raising inflation expectations, resilient U.S. data are keeping the Fed hawkish, and investors are demanding more compensation for duration risk," said Tickmill Group strategist Patrick Munnelly.
Oil prices are in steep backwardization, where traders pay more for near-term delivery of oil than longer-term delivery. Brent crude for November delivery fell 1.6% to $103.63 a barrel, while December Brent crude contracts slipped 1.8% to $96.07 a barrel. Prices fell following Kpler data that showed exports from the Gulf region reached 80% of prewar levels in September.
Futures for the Dow Jones Industrial Average climbed 0.3%, while Nasdaq and S&P 500 futures gained 0.4% and 0.2%, respectively. Stocks linked to artificial intelligence showed signs of renewed momentum. Chip makers strengthened in premarket trade, while AI-related stocks also led equity indexes in Europe, where the continent-wide Stoxx 600 increased 0.5% in early trade. ASML, the continent's most valuable company, gained over 3.5%. Asian indexes were largely in the red, however, with tech-heavy indexes in Japan and South Korea slipping.
Bitcoin rose back above $84,000, while New York gold contracts edged up by 0.4%, but held below $4,200 a troy ounce.
For the day ahead, the U.S. August job openings data is the major macro release. Sam Altman will speak at OpenAI DevDay in San Francisco. Investors in U.K. government bonds will look for any clues on U.K. spending plans as Prime Minister Andy Burnham speaks at the ruling Labour Party's annual conference.
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