U.S. stock futures were little changed on Thursday after the U.S. Treasury Department announced plans to at least double the size of its bond buyback programme, while a sharp rise in oil prices kept investors cautious.
The Treasury’s planned purchases of longer-term government debt could ease pressure on financial markets by helping push bond yields lower, potentially providing some support for equities.
Futures tied to the S&P 500 were broadly flat, while Dow Jones Industrial Average futures slipped 0.1 percent. Nasdaq futures edged up 0.1 percent.
Oil prices, meanwhile, jumped sharply after ballistic missile fire in the United Arab Emirates triggered nationwide warnings for residents, marking the first such alarm in several weeks.
The latest escalation came as President Donald Trump threatened to increase economic pressure on Iran, further clouding hopes for a near-term resolution to the conflict and raising concerns over global energy supplies.
Brent crude, the international benchmark, surged 2.5 percent to $93.90 a barrel, compared with about $72 before the war. U.S. benchmark crude also gained 2.8 percent to $86.72 a barrel.
U.S. Treasury yields fell following the buyback announcement. Longer-term yields had climbed in recent months amid concerns over inflation linked to the Iran conflict and the growing U.S. government debt burden.
The U.S. national debt surpassed $40 trillion on Wednesday, as defence spending increased amid heightened American involvement in the Middle East.
The yield on the benchmark 10-year Treasury note fell to 4.68 percent on Thursday, although it remained well above levels recorded before the outbreak of the Iran war. The 30-year Treasury yield also eased to about 5.22 percent.
Asian bond markets followed the U.S. move, with Japan’s 10-year government bond yield falling to around 2.85 percent. The yield had recently traded close to 30-year highs.
Shares of Walmart fell more than 6 percent in premarket trading after the retail giant issued a cautious outlook for the year. Investors closely watch Walmart as an indicator of consumer spending because of its broad customer base.
Markets are also awaiting the latest U.S. unemployment claims data. The previous report showed 209,000 Americans filed for unemployment benefits two weeks earlier, above the revised 200,000 recorded the previous week and higher than economists’ forecast of 205,000.
In Europe, Germany’s DAX fell 0.5 percent to 25,960.44, France’s CAC 40 declined 0.4 percent to 8,466.75, while Britain’s FTSE 100 shed 0.3 percent to 10,707.92. Asian shares, however, traded higher, while the U.S. dollar rose to 158.50 Japanese yen from 158.16 yen and the euro traded at $1.1696, up from $1.1677.
