US stock futures dip as oil breaches $100 mark for the first time since mid-year

The Consumer Price Index report scheduled for Friday and Producer Price Index data on Thursday will be in focus for clues on the Fed's rate path. "This week's CPI report is the most consequential data point before the Fed's September meeting, the last inflation reading policymakers will see before deciding on rates," Glenmede strategists wrote. Wall Street futures fell on Wednesday as oil prices surged past the market-sensitive **$100-a-barrel** level for the first time since July due to deepening Middle East tensions and investors stepped cautiously before inflation data due later in the week. Traders have struggled to look past the U.S.-Iran war, now in its seventh month, which has raised the risk of a broader regional conflict. At 07:00 a.m. ET, Dow E-minis YMcv1 fell 345 points, or 0.65%, S&P 500 E-minis EScv1 lost 31 points, or 0.40%, and Nasdaq 100 E-minis NQcv1 dropped 152.25 points, or 0.52%. Chipmakers Intel INTC.O and Arm Holdings ARM.O fell 1.67% and 0.45%, respectively, in premarket trading, while Nvidia was down 0.51%. Investors are still gravitating to AI-related stocks, helping the sector outperform despite broader market sentiment remaining subdued. Concerns about circular deals have kept some cautious, however, as companies at the heart of the AI boom turn to financing each other. "Investors should expect these deals to eventually support a consistent flow of higher revenue for the parties involved. If not, we believe markets are going to increasingly become exposed to a tangled web of risks that may not be easily untied," said Anthony Saglimbene, chief market strategist at Ameriprise Financial. U.S. Federal Reserve Chair Kevin Warsh's focus on controlling prices has also led traders to expect a hike in borrowing costs this month. Markets now see a 62.4% chance interest rates will be increased by 25 bps when the central bank meets next week, according to data from the CME FedWatch tool. "Higher oil and rates remain the main risks to equities in the near term. It is well understood now that strategic reserves have been drawn down substantially to cushion oil prices," Morgan Stanley analysts led by chief U.S. equity strategist Mike Wilson said in a note. Brent crude LCOc1 held near $100 a barrel after crossing the psychological threshold for the first time since the middle of the year. Investors will also await the U.S. Treasury's buyback announcement later in the session, weeks after the department said it would buy more longer-dated bonds to curb rising yields. Such announcements typically feature a list of bonds eligible for buyback. However, "some market participants are looking to this announcement for some confirmation on the size Treasury will buy," J.P.Morgan analysts said in a note. Any reaction in the bond markets could influence equities, which are typically pressured by elevated yields on risk-free government bonds.

US stock futures dip as oil breaches $100 mark for the first time since mid-year

Inflation data in focus

Futures slip as oil tops $100

Chipmakers and AI stocks in focus

Rates expectations and Treasury buyback loom

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