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EsOil Slips as Fed Opens Two-Day Meeting; Chips Weigh on Futures
WTI fell 1% to $82 as the Fed began a two-day meeting with a rate decision due Wednesday. Hopes for U.S.-Iran talks eased supply fears. U.S. stock futures were mixed and chip shares retreated.
U.S. benchmark West Texas Intermediate dropped 1% to $82 a barrel, its third straight decline after a late-week spike above $92. Prices eased as traders considered the chance of renewed U.S.-Iran peace talks following a pause in fighting near the Strait of Hormuz. President Trump stated Iran requested a new round of talks. Officials in Tehran rejected that account and maintained that no direct talks are under way.
The Federal Reserve began a two-day policy meeting today. A rate decision and a press briefing with Chair Kevin Warsh are scheduled for Wednesday. Investors broadly expect no change at this meeting. Market pricing still reflects the likelihood of at least one increase later this year to counter inflation that has moved further above the 2% target as fuel costs climbed during the Iran war. Warsh has emphasized that bringing down inflation is the priority and that the central bank will offer less forward guidance than in recent years.
U.S. equity futures were mixed. Dow Jones Industrial Average futures rose about 0.7%, S&P 500 futures were little changed and Nasdaq futures fell roughly 0.8%. The 10-year Treasury yield slipped to 4.63%. Gold futures declined 1% to $4,030 an ounce, and bitcoin traded near $63,400 after touching roughly $65,000 overnight.
Chipmakers led premarket losses on concerns about valuations and the sustainability of AI-related spending. Shares of Nvidia, Broadcom, Micron, Marvell, Intel, Sandisk and SK Hynix fell before the opening bell, and the iShares Semiconductor ETF dropped about 4%.
Earnings moved individual names. UPS rose about 1% after beating estimates and raising its full-year sales and profit outlook as part of a turnaround plan that included job cuts last year. Coca-Cola gained more than 3% after topping forecasts and lifting guidance, citing a "dynamic consumer landscape." Boeing advanced about 1% after reporting revenue above expectations alongside a wider adjusted loss. After the close, results are due from Visa and hard drive maker Seagate Technologies. Reports from Meta Platforms, Microsoft, Amazon and Apple are scheduled later this week.
On Monday, the Dow rose while the S&P 500 was little changed and the Nasdaq slipped slightly ahead of the Fed decision and a busy slate of earnings.
