Dow futures fall 315 points as yields, oil rise

Dow futures fell about 315 points as Wall Street opened September with rising oil prices, the U.S. 10-year Treasury yield near 4.79% and renewed tensions in the Middle East. S&P 500 futures slipped roughly 0.56% and Nasdaq 100 futures lost about 0.97% in pre-market trading.

Brent crude climbed above $91 a barrel and West Texas Intermediate topped $87 after renewed U.S.-Iran hostilities raised concerns about potential supply disruptions around the Strait of Hormuz. The 10-year Treasury yield moved close to a two-year high as investors priced a longer period of higher interest rates.

Higher Treasury yields reduce the present value of future earnings, putting pressure on highly valued growth stocks. Richard de Chazal, a macro analyst, wrote that the path of least resistance for yields still looks higher and that efforts to cap long-term rates have highlighted fiscal and inflation pressures pushing them up.

Research director Kathleen Brooks noted that the combination of military tension, higher oil prices and rising bond yields creates a difficult backdrop for markets at the start of September. The energy sector reflected crude gains, with Exxon Mobil and Devon Energy trading higher in pre-market action.

September has historically been one of the weaker months for U.S. equities. Anthony Saglimbene, chief market strategist, observed that seasonal patterns alone are not a reason to exit markets and pointed to the broader economic and corporate backdrop as continuing to provide support after the S&P 500’s strong August performance.

Economic data this week could shift market direction. July’s Job Openings and Labor Turnover Survey is scheduled for 10 a.m. ET; June readings showed 7.36 million job openings and 5.3 million hires. The JOLTS report is followed by ADP private payrolls and Friday’s nonfarm payrolls figure. Markets are increasingly pricing the possibility of a September Federal Reserve rate increase, so softer labor data could reduce yields while stronger employment readings could reinforce the Fed’s focus on inflation.

On individual stocks, Morgan Stanley upgraded Robinhood to Overweight from Equalweight and raised its price target to $150 from $124, citing an expanding product lineup and improved revenue generation from the existing customer base. Hut 8 rose after Anthropic agreed to a roughly $35 billion cloud-computing deal with Lambda; Hut 8 is building the Texas data center tied to that project.

Traders and market participants will receive the JOLTS data and subsequent employment reports this week alongside ongoing moves in oil and Treasury markets.