By CHAN HO-HIM and MATT OTT AP Business Writers
Wall Street pointed slightly higher in premarket trading Tuesday after nearing a record close to open the week as oil prices retreat to the lowest level in more than a month.
Futures for the S&P 500 rose 0.4% before the opening bell, while futures for the Dow Jones Industrial Average climbed 0.6%, as did Nasdaq futures.
Surging oil prices and bond yields have added to challenges for the broader stock market and companies in general, but expectations for strong company earnings have helped support stocks’ recent rallies.
With little economic data coming this week, markets will continue to monitor geopolitical news as well as a handful of quarterly financial results from Levi’s, PepsiCo and Delta Air Lines before earnings season kicks into high gear next week.
Oil prices were down about 2% early Tuesday. Brent crude, the international standard, was down $1.99 to $98.33 per barrel, back to below the $100 mark, but still much higher than the roughly $72 a barrel level of late February.
Benchmark U.S. crude gave up $1.83 to $87.60 per barrel.
Analysts say upward pressures on oil prices have eased as larger volumes of oil have been crossing the Strait of Hormuz and oil flows through Saudi Arabia’s key East-West pipeline have been recovering, although tensions between the U.S. and Iran are still high.
“While there are growing signs of a recovery in oil flows from the Persian Gulf, the market remains nervous about potential supply disruptions from the region. This is keeping prices well-supported for now,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a commentary on Tuesday.
In the bond market, U.S. Treasury yields were near their multi-decade highs. The 10-year U.S. Treasury yield eased to around 5.26%, after it briefly crossed the 5.35% mark, its highest level since 2002.
Investors are looking for higher returns to hold government bonds, as inflationary pressures have been rising, driven in part by the energy shock from the Iran war, while U.S. national debt has surpassed a record $40 trillion.
The Federal Reserve releases minutes from its September meeting Wednesday, which is garnering heavy interest because the central bank decided to raise U.S. benchmark interest rates for the first time in three years.
In midday European trading, Britain’s FTSE 100 gained 0.4%, while France’s CAC 40 and Germany’s DAX each gained 0.6%.
In Asia, Japan’s Nikkei 225 rose 1.1% to 70,683.98. The benchmark has surged above the 70,000 level this week for the first time since early July.
South Korea’s Kospi lost 0.9% to 6,941.39.
Technology-related stocks in Japan and South Korea were volatile. Japanese chip testing equipment manufacturer Advantest gained 3.9%, while OpenAI investor SoftBank Group fell 3.1% after its CEO Masayoshi Son warned of potential dangers related to the technology.
South Korea’s Samsung Electronics dropped 1.5%, and memory chipmaker SK Hynix slipped 3.7%. Hong Kong’s Hang Seng climbed 1% to 24,280.56. Markets in mainland China were closed for a national holiday.