Stock Market Today: Stocks slip as inflation fears, oil surge, hit sentiment

U.S. equity futures edged lower Friday while Treasury bond yields steadied and the dollar retreated, as investors prepped for the start of the third quarter earnings season amid renewed inflation concerns and the escalating war in Israel. 

A trio of major banks, lead by JPMorgan Chase  (JPM) - Get Free Report, will publish third quarter earnings prior to the opening bell as the reporting season gets into full-gear on Wall Street, with investors likely focused on the state of the consumer heading into the final months of the year.

Collective S&P 500 earnings for the three months ending in September are expected to grow 1.3% from last year to a share-weighted $464.4 billion, according to Refinitiv data, representing the strongest quarterly gain of the year.

Markets are also once again fretting over the pace of inflation in the world's biggest economy, following a faster-than-expected reading of headline CPI yesterday, powered in part by higher energy prices, and a pair of weak Treasury bond auctions that suffered from softer foreign demand. 

The data, as well as the 10-year and 30-year bond sales, have lifted bets on a December rate hike from the Fed, with the CME Group's FedWatch placing the odds at around 33%. 

Treasury yields eased in the overnight session, however, following reports that Israel may begin a ground invasion in Gaza in response to the deadly attacks from militants in the region earlier this week. 

Benchmark 10-year notes were marked at 4.643% in overnight trading, with 2-year paper changing hands at 5.037%, while the U.S. dollar index slipped 0.23% to 106.368 against a basket of its global peers. 

Global oil prices, however, were moving firmly in the opposite direction after the U.S. imposed fresh sanctions on tanker operators moving Russian crude that is priced above the $60 cap put in place last year following Moscow's invasion of Ukraine.

Brent crude contracts for December delivery, the global benchmark, rose $2.47 in overnight trading to $88.47 per barrel while WTI futures for November jumped $2.52 to $85.43 per barrel.

On Wall Street, stock futures were little-changed from last night's closing levels, with contracts tied to the S&P 500 indicating a 4 point opening bell decline and those linked to the Dow Jones Industrial Average priced for a 9 point dip. The tech-focused Nasdaq was called 36 lower. 

In overseas markets, European stocks were also in the red, with the region-wide Stoxx 600 falling 0.57% in Frankfurt and Britain's FTSE 100 down 0.37% in London in early dealing.

Overnight in Asia, the follow-on selling from Wall Street's weaker close pushed the Nikkei 225 0.55% lower, while muted inflation data in China, and concerns over the fate of the region's biggest economy, kept the MSCI Asia ex-Japan index firmly in the red, falling 1.2% into the close of trading. 

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