U.S. stock index futures were largely subdued on Thursday as government bond yields rebounded after a respite earlier in the week, while markets assessed Walmart's earnings.
The retail bellwether dropped 5.8% in premarket trading after missing Wall Street expectations for quarterly comparable sales as shoppers pulled back on spending in the face of rising gas prices.
Concerns over elevated oil prices stemming from the Iran conflict and increasing government debt battered bond markets this week, sending the U.S. 30-year Treasury yield to a near-two-decade high.
Yields retreated sharply in the previous session, however, after the U.S. Treasury announced support measures for long-duration bonds, which improved global risk appetite.
The 30-year Treasury bond yield crept up 2.3 basis points to 5.217% on Wednesday. On the benchmark 10-year bond , it inched higher as well and was last at 4.67%.
Against this backdrop, the Treasury Department said on Wednesday that total U.S. debt has topped $40 trillion for the first time.
"These moves combine several factors that have historically challenged risk assets: higher bond yields, higher oil prices, and weakness in the technology and AI-linked shares," said analysts at UBS Global Wealth Management.
"While they deserve attention, we do not believe recent market moves undermine the core case for equities."
At 07:16 a.m. ET, Dow E-minis fell 103 points, or 0.19%, S&P 500 E-minis were down 3 points, or 0.04%, and Nasdaq 100 E-minis lost 15.25 points, or 0.05%.
Megacap and growth stocks were mixed on Thursday, with Apple (AAPL.O) and Alphabet (GOOGL.O) inching 0.1% lower, while Nvidia (NVDA.O) and Meta (META.O) ticked up slightly.
Oil prices rose 2.7%, extending gains for the fifth consecutive session on stalled U.S.-Iran peace talks and Middle East supply disruptions.
The recent macro developments have knocked the S&P 500 (.SPX) and the Dow (.DJI) off record highs clocked earlier this month, on the back of a strong earnings season, as numbers from companies in several sectors including some AI hyperscalers paint a strong picture of corporate America.
Investors will look for a report on weekly jobless claims data later in the day, along with comments from St. Louis Fed President Alberto Musalem.
Minutes from the U.S. Federal Reserve's July meeting, released on Wednesday, had shown concern about inflation deepening at the central bank, with "several" policymakers ready to raise interest rates and "many" saying a hike in borrowing costs will be needed if inflation does not decline to the central bank's 2% target.
In early movers, Coty (COTY.N) fell 11.2% after the CoverGirl owner forecast current-quarter earnings below expectations and withheld its annual outlook.
Shares of cryptocurrency-related companies rallied a day after U.S. President Donald Trump called on Congress to pass a crypto bill. Bitcoin hoarder Strategy (MSTR.O) added 10.4% and exchange operator Coinbase Global (COIN.O) rose 7.6%.
Biotech company Moderna (MRNA.O) dipped more than 11% a day after surging nearly 177%.
Deere (DE.N) gained 1.1% after the world's largest farm-equipment manufacturer raised its full-year net income forecast.
