By Tharuniyaa Lakshmi and Shashwat Chauhan
Oct 8 (Reuters) - US stocks edged lower on Thursday as soaring oil prices and Treasury yields near multi-year highs stoked inflation worries on the cusp of a critical earnings season expected to test recent market gains.
Brent crude futures jumped 4.2% to more than $104 a barrel on persistent worries about supply from the Middle East after increasing attacks on shipping in the Gulf and the Strait of Hormuz.
The bond market rout showed no sign of abating as
the yield on the benchmark 10-year Treasury bond stood at 5.29%, close to its highest mark since 2002.
Risk assets around the world took a hit on Thursday. Megacap growth stocks were broadly lower, with Amazon.com, Tesla and Nvidia down between 0.3% and 1.3%.
Chip-related companies also eased, with Marvell Technology and Intel losing about 3% apiece and AMD down 2%.
Forecasts of record quarterly profit from memory-chip giant Samsung Electronics failed to lift sentiment and its shares closed lower in South Korea. Rival Micron Technology dropped 1.4%.
Meanwhile, the Wall Street Journal reported on Wednesday that Broadcom is lining up $50 billion of financing for OpenAI, with Oracle also seeking an unspecified sum, spurring fears that massive debt issuance by technology companies could intensify the competition for capital.
Broadcom and Oracle were trading lower amid wider weakness in tech stocks.
A rebound in Treasury yields and oil prices knocked the S&P 500 and the Nasdaq from record highs a day earlier, while the Dow snapped a four-day winning streak.
"We've got dueling headwinds with energy prices and Treasury yields and light on the economic data front, kind of a wait and see on earnings which really kick off in earnest next week," said Art Hogan, chief market strategist at B. Riley Wealth.
Eight out of 11 S&P 500 sectors traded lower, with the technology and healthcare indexes losing the most.
Energy and consumer staples were leading gains, rising about 2% and 1%, respectively, while utilities was marginally higher.
At 09:43 a.m. ET, the Dow Jones Industrial Average fell 88.19 points, or 0.17%, to 51,096.19, the S&P 500 lost 28.08 points, or 0.36%, to 7,773.69, and the Nasdaq Composite shed 155.07 points, or 0.58%, to 27,383.62.
WALL STREET AWAITS EARNINGS
Big banks including JPMorgan Chase are due to report results next week. Optimism around strong earnings has buoyed US stocks lately despite shaky geopolitical developments and concerns about rising interest rates.
The technology and energy sectors are expected to report the biggest quarterly earnings growth, while the broader S&P 500 is expected to post a 30.6% increase in quarterly earnings, according to data compiled by LSEG.
US Federal Reserve Governor Christopher Waller hinted at a possible pause at the central bank's upcoming meeting. Additional rate hikes would likely be needed to lower inflation to the Fed's 2% target, but there was "flexibility" about the pace of increases, he said earlier in the day.
Traders widely expect the Fed to hold rates steady at its October meeting, but a December hike is still on the cards, according to CME FedWatch.
In individual movers, Wolfspeed soared 9.6% after the chipmaker received a $1.5 billion conditional loan commitment from the US Department of Defense.
PepsiCo cut its annual core profit forecast and said it would pursue additional spending cuts. Its shares rose 2.1%.
Declining issues outnumbered advancers by a 1.64-to-1 ratio on the NYSE and by a 2.53-to-1 ratio on the Nasdaq.
The S&P 500 posted 3 new 52-week highs and 12 new lows, while the Nasdaq Composite recorded 13 new highs and 128 new lows.
(Reporting by Tharuniyaa Lakshmi and Shashwat Chauhan in Bengaluru; Editing by Pooja Desai)
