US stock futures declined as weakness in technology shares, a fresh surge in long-term bond yields to multi-decade highs, and an extended rally in oil prices collectively eroded traders' appetite for riskier assets. By 7:47 a.m. in New York, futures on the S&P 500 were down 0.4%, on track for a third straight session of losses, while Nasdaq 100 futures fell 1.1% and Dow Jones Industrial Average futures were roughly flat.

The rally in chip stocks since August stalled in pre-market trading, with an ETF tracking the semiconductor sector dropping 3.4%. Nvidia slipped 1.8%, and the cost of insuring its debt against default moved closer to the highs seen last month. Equities are facing mounting pressure as financing costs climb, with bond investors demanding greater compensation for funding aggressive government spending while also seeking protection against persistently stubborn inflation. Elevated oil prices have further reinforced expectations that central banks will need to maintain a tighter monetary policy stance.

“The situation in the Middle East has clearly escalated again, and long-term interest rates are also on the rise—and ultimately, these factors will erode the value of stocks,” said Emma Moriarty of CG Asset Management. “And it’s summer, so market liquidity is a bit thinner, which makes it more susceptible to volatility.” Traders anticipate continued turbulence in tech stocks as investor focus oscillates between robust earnings and concerns over whether debt-fueled infrastructure investment will generate sufficient returns to justify the spending.