Before the bell: Dow futures drop about 1% as oil jumps 5% and the 10-year yield sits near 5.35%

U.S. stock futures are lower Thursday morning as higher oil and higher Treasury yields hit at the same time. At 7:16 a.m. ET on the Chronicle markets board, S&P 500 futures were 7,766.0, down 0.53%, Nasdaq-100 futures 30,943.4, down 0.79%, Dow futures 50,706.3, down 0.95%, and the Russell 2000 2,765.5, down 1.07%. CNBC put the Dow futures loss at about 510 points earlier in the morning.

Yields and the Fed

The official Treasury close on Wednesday was 5.28% for the 10-year, 4.77% for the 2-year and 5.67% for the 30-year, per the Treasury's daily curve. CNBC said the 10-year was trading around 5.32% to 5.35% this morning, near levels not seen since 2002, and the 30-year near 5.71% to 5.73%.

The push came from Fed Governor Christopher Waller, who said more rate hikes are needed to curb inflation but that there is "flexibility" on the pace, according to Bloomberg and Reuters headlines. The fed funds rate is 3.75% to 4%, and the next meeting is October 27-28; yesterday's minutes showed most officials expected another increase by year end. The Treasury also sells 30-year bonds later today, which CNBC called a closely watched test of demand.

Oil, the storm and the pump

CNBC reported Brent up 5.1% to $105.33 a barrel and WTI up 5% to $92.71, after President Trump said he did not want a deal with Iran to end the war. OilPrice.com listed a tanker attack off Qatar, the first deep-Gulf strike in nearly a month, and said Hormuz tanker traffic hit a two-month low. Heating oil futures on its page were $4.838 a gallon, up 4.7%. WTI on our board was $94.20, up 4.0%, at 7:16 a.m.

A second supply risk is domestic. Hurricane Isaias, the season's first, is forecast to reach the northern Gulf Coast late Friday or early Saturday with a life-threatening storm surge, CNBC reported. OilPrice.com said Shell is evacuating five platforms and Chevron four, and that Gulf offshore fields supply about 15% of U.S. oil and 5% of natural gas. The bigger worry it flagged is Gulf Coast refineries, which are running flat out during a global fuel crunch. For fleets, the pass-through is diesel: see our piece on record diesel.

On the calendar

Initial jobless claims are due at 8:30 a.m. ET, forecast at 200,000 against 197,000 the prior week, on our economic calendar. Existing home sales follow on October 13 and September CPI on October 14. Freddie Mac's weekly survey also lands today; last week it put the 30-year mortgage rate at 7.28%, up from 7.03%.

Company news

PepsiCo beat on both lines but cut its profit outlook. CNBC reported adjusted earnings of $2.34 a share against $2.29 expected by LSEG analysts, and revenue of $25.27 billion against $24.96 billion. The number underneath is the guidance: full-year core EPS growth is now 2.5% to 3.5%, down from a prior outlook of the low end of 5% to 7%, while revenue growth of about 6% moved to the high end of its range. North America is the drag; international was 41% of net revenue so far this year, CEO Ramon Laguarta said. Shares were down less than 1% premarket.

Overseas, metals and crypto

Japan's Nikkei closed down 1.42% and South Korea's Kospi fell 2.62%, per CNBC. On our board gold was $4,120.95, up 0.23%, silver $58.76, down 1.72%, and the dollar index 102.10, up 0.16%, with the yen at 158.25 per dollar. On Coinbase, Bitcoin was $82,366, down 1.6% from its 24-hour open, and Ether $2,530, down 1.9%.

24,679 independent trucking and freight are listed on CheckThisBiz, a directory of 7,704,724 independent US businesses, including 2,868 in TX, 2,828 in CA, 1,916 in FL. Chains and franchises are excluded from that count, so these are the owner-operated businesses that actually apply for funding.

Sources: CNBC, Bloomberg, OilPrice.com, U.S. Treasury, Freddie Mac, Chronicle markets board, Coinbase Exchange. Quotes were taken before the open and move quickly; early volume is thin. This is market information, not investment advice.