U.S. futures are flat as artificial intelligence-related stocks continue to sell off and oil prices rise again.
AI-related stocks have become volatile in recent months as the value of company shares have soared while confidence in a pay off, at least soon, has waned.
The futures for the S&P 500 were relatively unchanged, while those for the Dow Jones Industrial Average rose 0.1 per cent. Nasdaq futures declined 0.1 per cent.
Oracle shares slipped more than 1 per cent before the market opened Wednesday. Shares of Marvell Technology and Intel both fell nearly 2 per cent. Micron Technology dipped 1 per cent. The seller of computer memory was one of the largest drags on the S&P 500 Tuesday.
Target’s stock declined 1.6 per cent even as the retailer reported its second straight quarter of comparable sales gains Wednesday under new CEO Michael Fiddelke.
Markets are also reacting to decision by President Donald Trump to delay U.S. tariffs on US$20 billion worth of Canadian import.
Later Wednesday, the Federal Reserve will release minutes from the most recent meeting of the rate-setting committee.
Crude prices continue to climb with the conflict over the Strait of Hormuz unresolved. Brent crude, which was trading for around US$70 per barrel before the start of the war, gained 1 per cent to US$91.91 per barrel early Wednesday. U.S. benchmark crude oil rose 1.1 per cent to US$84.99 per barrel.
Bond yields have jumped since the war began because high oil prices are pushing inflation higher. That has increased the anxiety over government debt and is also one of the reasons the fast-growing tech sector, which thrives when borrowing costs are low, is under pressure.
The yield on the 10-year U.S. Treasury edged down to 4.70 per cent from 4.72 per cent Wednesday but remains well above its 3.97 per cent level from just before the war with Iran began. The 30-year Treasury yield also ticked lower but is still near its highest level since 2007.
High yields have already sent the average long-term U.S. mortgage rate near its highest level in a year, which has hurt the housing industry.
In Europe, Germany’s DAX shed 0.1 per cent to 26,084.43, while the CAC 40 in Paris rose 0.3 per cent to 8,535.30. Britain’s FTSE 100 slipped 0.2 per cent to 10,705.47.
In Tokyo, the Nikkei 225 sank 3.2 per cent to 65,326.42 as worries over rising bond yields coupled with selling of tech shares pulled the benchmark lower.
The U.S. dollar fell to 159.13 Japanese yen from 159.61 yen. The euro rose to US$1.1604 from US$1.1577.
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Elaine Kurtenbach And Michelle Chapman, The Assoicated Press.
Associated Press Business Writer Chan Ho-him in Hong Kong contributed.
