U.S. stock futures are trading slightly lower on Tuesday as investors remain cautious ahead of the Federal Reserve's September policy decision. Rising oil prices, Treasury yields above 5%, continued pressure on AI-related stocks and renewed Middle East supply concerns are weighing on market sentiment. Market Snapshot Dow Futures: ~-0.25% S&P 500 Futures: ~-0.18% Nasdaq 100 Futures: ~-0.14% 10-Year Treasury Yield: ~5.03% Brent Crude: ~$107 WTI Crude: ~$103 VIX: ~17 Bitcoin: ~$77K Gold: ~$4,324 Key Market Drivers Treasury Yields Break Above 5% The 10-year U.S. Treasury yield has moved above 5%, reaching its highest level since 2007. The move reflects growing concerns about inflation, higher energy prices, government borrowing and expectations that interest rates may remain elevated. Higher Treasury yields can put additional pressure on equity valuations, particularly in technology and other high-growth stocks where valuations depend heavily on future earnings. Fed Meeting Begins Today The Federal Open Market Committee meeting begins Tuesday, with the policy decision expected Wednesday. Markets are pricing in a very high probability of a 25-basis-point rate hike, with Reuters reporting approximately a 92.5% probability. Investors will focus not only on the rate decision but also on the Fed's updated economic projections and guidance for future policy. The combination of elevated oil prices and inflation concerns could make the Fed's policy outlook particularly important for markets. Oil Prices Remain Above $100 Brent crude is trading around $107 per barrel, while WTI is above $103, as ongoing Middle East tensions and disruptions to energy infrastructure continue to raise concerns about global supply. Sustained oil prices above $100 could add to inflation pressures and make it more difficult for central banks to shift toward easier monetary policy. AI and Semiconductor Stocks Under Pressure Technology and semiconductor stocks remain under pressure following renewed concerns about the pace and risks surrounding AI development. Monday's market decline was led by weakness in major chipmakers, with investors reassessing AI-related valuations and spending expectations. However, the recent selling has not yet been viewed as a broad deterioration in the underlying AI investment cycle. Higher Treasury yields are adding another layer of pressure to the technology sector. Global Bond Markets Also Under Pressure The rise in U.S. Treasury yields is part of a broader global bond-market selloff. Japanese and European yields have also moved higher, increasing borrowing costs across major economies. This global rise in yields could remain an important factor for equities, currencies and commodities in the near term. Economic Data in Focus Investors will be watching several economic and Treasury events today: Empire State Manufacturing Index — 8:30 AM ET Treasury Buyback Announcement — 11:00 AM ET 4-Week, 8-Week & 4-Month Bill Announcements — 11:00 AM ET 6-Week Bill Auction — 11:30 AM ET 20-Year Bond Auction — 1:00 PM ET Treasury Buyback Results — 2:00 PM ET The economic data and Treasury auctions could influence bond yields and market expectations ahead of Wednesday's Fed decision. Market Outlook The current market pressure is being driven primarily by macro and geopolitical factors, rather than a broad deterioration in corporate earnings. Key factors to watch: Higher Treasury yields + elevated oil prices + Fed rate expectations + AI/semiconductor weakness + Middle East tensions The 5% level in the 10-year Treasury yield is an important psychological threshold. A further rise in yields or crude oil could keep pressure on high-growth stocks, while easing yields and oil prices could improve risk appetite. Bottom Line The U.S. market is entering a potentially volatile Fed week with several major crosscurrents. Oil above $100, Treasury yields above 5% and uncertainty surrounding AI valuations are keeping investors cautious. The key market catalysts over the next 24–48 hours will be the Fed meeting, Treasury yields, crude oil prices and the reaction of technology and semiconductor stocks. A stabilization in oil and yields could support a market rebound, while another move higher in either could increase risk-off pressure across equities.