Stock market today: Dow, S&P 500 and Nasdaq futures fall after tech rally as Treasury yields rise

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U.S. stock futures fell Wednesday morning as global bonds fell and investors awaited minutes from the Fed’s September meeting.

Dow Jones Industrial Average Futures (YM=F) slipped 0.5%. Futures on the S&P 500 (ES=F) fell 0.2%, and the Nasdaq-100 (NQ=F) fell 0.6% after both indexes hit record highs the day before.

The yield on the 30-year Treasury note rose to 5.70%, the highest since 2002, ahead of the release later in the day of minutes from the Federal Reserve’s September policy meeting, where policymakers raised interest rates to combat inflation.

Sentiment turned buoyant in markets this week as bullish earnings estimates helped propel major indexes to all-time highs. But as Yahoo Finance’s Brian Sozzi pointed out Tuesday, those records belie a highly concentrated market, where the index’s top three stocks (Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT)) make up about a fifth of the S&P 500.

Factors that have weighed on markets this year could still pose headwinds. Brent crude oil futures (BZ=F) remain above $100 per barrel amid the latest Houthi attacks in the Middle East.

Wednesday’s Fed meeting minutes will provide clues as to whether the central bank’s September rate hike was a one-off or whether its thoughts point to more rate hikes to come. On Tuesday, traders were pricing in a roughly 20% chance of a rate hike at the Fed’s October meeting next week.

On the results calendar, Levi Strauss & Co. (LEVI) and applied digital (APLD) report the results.

LIVE 4 updates

  • Constellation Brands stock falls despite Corona maker reporting better-than-expected results

    Constellation Brands (STZ) stock fell 5%, although beer makers Corona and Modelo beat Wall Street profit expectations.

    In the second quarter, Constellation Brands reported net revenue of $2.63 billion, above analysts’ expectations of $2.54 billion, according to consensus data from S&P Global Market Intelligence. Adjusted earnings per share of $3.74 also beat estimates of $3.55.

    Constellation Brands said off-premises sales, which include drinks sold at grocery and convenience stores, declined, while on-premises sales at restaurants and bars increased.

    The same trend occurred for the World Cup in June and July, where on-site volumes were strong, but World Cup off-site sales were lower than industry expectations.

    The company reaffirmed its full-year adjusted earnings per share guidance of between $11.20 and $11.90. Beer sales continue to fall 1% to a 1% increase, wine sales 1% to a 1% increase and corporate sales 1% to a 1% increase.

  • AI agents go rogue and chases will get complicated

    Yahoo Finance’s Hamza Shaban writes in today’s Morning Brief newsletter:

    It’s a new reality: AI agents are bypassing their sandboxes to access places they’re not supposed to. We have learned to endure (or largely ignore) cyberattacks as part of the cost of doing business, or indeed existing, while connected to the Internet.

    But AI agents pose a new dilemma. Rather than bad actors exploring vulnerabilities, using whatever tools they have, agents are sophisticated products of some of the most influential and powerful technology companies in the world.

    “Agents going rogue is the biggest risk today. Imagine an agent in your enterprise network gets hacked or hijacked or becomes rogue,” Jay Chaudhry, founder and CEO of Zscaler (ZS), said on Yahoo Finance’s Sozzi Unleashed. “Don’t trust AI agents.”

    Every week, it seems, we see sheepish revelations from OpenAI (OPAI.PVT) and co. that his agents “accidentally” hacked something he shouldn’t have.

    A society must fight against certain elements of crime. But what if these criminal acts were in part perpetrated by the supposedly honest companies that fuel the S&P 500? Although defending against rogue agents may seem futile, here we are in America, and we can always go on the offensive and throw out the book.

    Learn more.

  • Good morning. Here’s what’s happening today.

  • Dollar maintains losses as markets wait for Fed minutes, speakers

    Reuters reports:

    The U.S. dollar remained lower on Wednesday after tensions in European bond markets eased and as eyes turned to the release of Federal Reserve minutes and speeches from its policymakers for signals on a possible rate hike.

    The euro saw its biggest rise in seven weeks in the previous session as French bond yields fell after the frontrunner in next spring’s presidential election announced plans to cut spending. The yen weakened even after a dovish Bank of Japan board member said he would support interest rate increases.

    Later on Wednesday, the US central bank is expected to release the minutes of its September 15-16 policy meeting, during which it raised interest rates to combat inflation. Comments from Fed policymakers appeared less hawkish after lower-than-expected personal consumption expenditures (PCE) and employment data last week.

    Learn more.

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