US stock futures retreated on Monday as oil prices surged toward a critical threshold, reigniting inflation concerns just days before a key consumer price data release. S&P 500 futures dropped 0.3% while Nasdaq futures turned negative by 8:15am, reversing earlier gains.
Brent crude traded around $99 per barrel after Saudi Arabia reported halted operations at facilities in the kingdom’s southern region due to s. Shai crude has already breached $102. What does this mean for central bank policy? Markets are bracing for the possibility of additional interest rate hikes to contain price pressures.
The oil surge comes at a delicate moment. A Federal Reserve communications blackout is in effect through September 17, ahead of the September 15 to 16 FOMC meeting. Investors won’t hear from Fed officials before crucial policy decisions are made.
Major technology stocks reflected the broader market weakness, with Amazon down 0.9%, Microsoft off 0.8%, and Alphabet falling 0.7%. Even so, Nvidia and Tesla managed modest gains.
Boston Scientific warned that a recent cyber will likely have a material impact on third quarter results, sending shares down 2%. Meanwhile, Herbalife surged 7% on news of a $250 million share buyback program, offering a rare bright spot in an otherwise cautious trading session.
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