Preview of US Stock Market | All three major stock index futures fell together. Brent crude broke above $100 again. The 30-year U.S. Treasury yield climbed to its highest level since 2002.

Pre-market Market Movements 1. On Wednesday, October 7, ahead of the U.S. stock market open, all three major U.S. stock index futures fell together. As of press time, Dow futures were down 0.69%, S&P 500 index futures were down 0.35%, and Nasdaq futures were down 0.66%. 2. As of press time, Germany's DAX index was down 1.28%, the U.K.'s FTSE 100 index was down 0.75%, France's CAC 40 index was down 1.18%, and the Euro Stoxx 50 index was down 1.79%. 3. As of press time, WTI crude oil was up 0.41% at $89.81 per barrel. Brent crude oil was up 0.66% at $101.24 per barrel. Market News Houthi attacks and a U.S. Gulf of Mexico storm heightened supply risks, pushing oil prices higher. Influenced by multiple competing factors, oil prices rose on Wednesday. Traders had to assess, on one hand, a new round of Houthi attacks on Saudi Arabia and oil and gas shutdowns in the U.S. Gulf of Mexico caused by a storm, while on the other hand seeing that Middle East crude supply was recovering. Saudi Arabia's General Authority of Civil Aviation said on Tuesday that Jizan's King Abdullah International Airport and Najran International Airport were attacked and damaged, with three people injured in the attacks. Outside the Middle East, a developing storm also shut in part of U.S. Gulf of Mexico crude production. The U.S. Bureau of Ocean Energy Management said that as of Tuesday morning, due to companies taking precautions against the storm, 185,120 barrels per day of offshore crude production had been shut in, accounting for 9.2% of total Gulf of Mexico output; at that time, no personnel evacuations had yet been carried out on any production platforms or drilling rigs. The outlook for Federal Reserve rate hikes remained uncertain: Daly focused on the persistence of inflation shocks, while Bowman pushed forward with bank regulatory reform. The Federal Reserve is simultaneously advancing important adjustments in both monetary policy and bank supervision. San Francisco Fed President Daly said she supported the Fed's September rate hike to address rising inflation risks, but whether further rate increases would be needed in the future would depend largely on whether the inflation shocks from tariffs, energy prices, and AI investment prove merely temporary or instead persist or even compound one another. Meanwhile, Fed Vice Chair for Supervision Bowman announced that she would restructure the regulatory system of Bank of America Corp and consider adjusting the bank asset-size thresholds that trigger stricter capital, liquidity, and stress-test requirements. The 10-year U.S. Treasury auction and FOMC meeting minutes were due to be released, and U.S. Treasury yields moved higher. Investors were set to face two key events on Wednesday. The FOMC meeting minutes were scheduled for release at 2 p.m. Eastern Time, and the market would scrutinize them for clues about the Fed's monetary policy decisions. At the Fed's September policy meeting, policymakers voted to raise rates, the first hike since 2023. Over the past six weeks, concerns about inflation and rising energy prices have triggered a bond selloff, sending U.S. Treasury yields steadily higher. According to CME's FedWatch tool, traders were currently pricing a 78% probability that the Fed would keep rates unchanged at its next meeting. The U.S. Treasury Department planned to auction $39 billion of 10-year notes on Wednesday. Amid multiple concerns over inflation, debt levels, and duration risk, the auction would test whether current yield levels were sufficient to attract buyers, or whether investors would demand a higher risk premium. The 30-year U.S. Treasury yield climbed to its highest level since 2002. As oil prices continued to rise, U.S. Treasuries extended their decline on Wednesday, with yields returning to the highs touched earlier in the week. The 30-year U.S. Treasury yield rose 5 basis points to 5.7%, while the 10-year yield rose 4 basis points to 5.3%. Traders further increased bearish bets on U.S. Treasuries, suggesting that the selloff that had pushed long-term U.S. Treasury yields to nearly 24-year highs might still have room to run. Shell CEO Sawan: Middle East oil flows recovered to about 80% of pre-war levels. Shell (SHEL.US) CEO Sawan said on Tuesday that Middle East oil flows had recovered to about 80% of pre-war levels, confirming the region's resilience in maintaining supply commitments to global markets. Although several banks and shipping analysts also believed that Middle East oil flows were approaching pre-conflict levels, Sawan's latest remarks provided one of the most authoritative assessments to date for gauging the pace of the region's export recovery. Data from ship-tracking agency Kpler showed that Saudi Arabia, the UAE, Iraq, Oman, Qatar, Kuwait, and Iran exported a combined daily average of nearly 16.33 million barrels of oil in September, down about 3.2 million barrels from about 19.51 million barrels before the conflict broke out in February this year, recovering to about 80% of pre-war levels. Crude oil shipped out of the Middle East through the Strait of Hormuz was estimated at nearly 9.72 million barrels per day, and this figure did not yet include vessels that had turned off their automatic identification systems to evade detection. JP Morgan: Deep U.S. distressed loans rose to a post-pandemic high, with technology the hardest-hit sector. JPMorgan strategists wrote on Tuesday that the tail of deep distress in the leveraged loan market had risen to its highest level since the early days of the pandemic, with technology the single most stressed sector. Specifically, the volume of loans trading below 60% of face value, or deep distress levels, rose to $65 billion from $40 billion a year earlier, the highest since March 2020. Distressed leveraged loans, meaning loans trading at 80% of face value or below, were also increasing, totaling $139.8 billion, surging nearly 90% over the past 12 months and only $4 billion below the May 2020 peak. Individual Stock News Shell (SHEL.US) previewed strong third-quarter oil trading results: refining margins surged to a record $42 per barrel. Shell expected its oil trading business to deliver strong third-quarter results, as tightening global fuel supply pushed refining margins to a record high. The energy giant said oil trading was consistent with strong performance in the previous three months, helped by a refining margin of $42 per barrel, far exceeding the previous quarterly high before 2022. As the Iran war and attacks on Russian refineries tightened global markets, Shell and its peers had been maximizing refinery capacity, shutting down for maintenance only when absolutely necessary. Shell's refinery utilization was only slightly below the previous quarter, when they had already been operating at full capacity. Shell's refinery run rates this quarter were only slightly below the prior quarter, when refineries were operating at full capacity. Uber Technologies, Inc. (UBER.US) planned to acquire ezCater for $2.3 billion in cash to expand corporate catering services. Uber Technologies, Inc. would acquire catering services company ezCater Inc. for $2.3 billion in cash, a move that would help the Uber Eats delivery platform reach more corporate customers. ezCater provides a catering services platform through which businesses can arrange catering for events, meetings, and other gatherings. Uber Technologies, Inc. said in a statement on Tuesday that the private company had generated more than $2.5 billion in gross bookings over the past 12 months and partnered with more than 140,000 restaurants across the United States. ezCater customers spent an average of more than $400 per order. The acquisition would help Uber Technologies, Inc. better compete with DoorDash (DASH.US), the leading U.S. food delivery platform. DoorDash launched a catering service product for corporate employees in April this year. Reportedly, Apple Inc. (AAPL.US) teamed up with LG to enter smart home: doorbells, thermostats, cameras, and other accessories would carry the LG brand. According to people familiar with the matter, Apple Inc. (AAPL.US) was about to step up its smart home device push, including doorbells, thermostats, and other accessories, which would be developed by Apple Inc. and LG Electronics through an unusual partnership. The products would be part of a device ecosystem that could work with Apple Inc.'s new smart home hub, while also being compatible with an upgraded HomePod mini and a new TV set-top box. Apple Inc.'s own new devices were scheduled for release on October 13. The people said the products Apple Inc. was developing with South Korea's LG also included smart anti-theft locks, indoor security cameras, outdoor security cameras, and floodlight cameras. Despite joint development, the products would use the LG brand, with LG responsible for manufacturing and product support. Hollywood giant Skydance (SKYD.US) was officially born. On Tuesday local time, Paramount Skydance completed its massive $110 billion acquisition of Warner Bros. Discovery (WBD), and the combined new company was officially named "Skydance," meaning a brand-new Hollywood giant was born. The deal brought together film studios such as Mission: Impossible, Harry Potter, and DC Studios, as well as major television and streaming networks including CBS, CNN, Paramount+, and HBO Max, creating an integrated entertainment company spanning film, television, and news operations. Shares of the combined company moved from Nasdaq to the New York Stock Exchange on Tuesday under the ticker "SKYD." Microsoft Corporation (MSFT.US) was expected to unveil a new Surface, without cloud computing power, aimed at AI developers. Microsoft Corporation would hold a special event in San Francisco on October 7 and remained tight-lipped about the agenda. Microsoft Corporation confirmed that the agenda included Windows, RTX Spark, and Surface-related content, but had not yet announced specific details. This was Microsoft Corporation's first event dedicated to Windows and Surface since the 2024 Copilot+ PC launch event. Unsurprisingly, a major focus of the October 7 event would be Microsoft Corporation's new hardware devices equipped with RTX Spark. The Surface Laptop Ultra had already been unveiled in June this year, and more hardware details, performance capabilities, and availability information for the device were expected to be announced at the San Francisco event.