Wall St slips as climbing oil, yields amplify inflation fears

US stocks fell on Thursday as a surge in oil prices and Treasury yields near multi-year highs stoked inflation worries before a crucial earnings season that is 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 and US output disruptions due to a hurricane.

The bond market rout showed no sign of abating as the yield on the benchmark 10-year Treasury bond stood at 5.3%, 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 falling around 1% and Tesla down 1.4%.

Chip-related companies also dropped after forecasts of record quarterly profit from memory-chip giant Samsung Electronics failed to lift sentiment, with its shares closing lower in South Korea. Rival Micron Technology was down 1.8%.

Meanwhile, the Wall Street Journal reported on Wednesday that Broadcom is lining up $50 billion in 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 down 1.4% and 2.1%, respectively, 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 of the 11 S&P 500 sectors traded lower, with healthcare and utilities losing the most, while energy and consumer staples led gains.

At 11:23 a.m. ET, the Dow Jones Industrial Average fell 239.36 points, or 0.47%, to 50,940.51, the S&P 500 lost 30.68 points, or 0.39%, to 7,771.09, and the Nasdaq Composite eased 151.25 points, or 0.55%, to 27,387.44.

Earnings in focus next week

Big banks are due to report results in the coming 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 lead quarterly earnings growth, with S&P 500 profits seen rising 30.6%, according to LSEG data.

Additional rate hikes would likely be needed to lower inflation to the Fed's 2% target, US Federal Reserve Governor Christopher Waller hinted earlier in the day, but said there was "flexibility" about the pace of increases.

Markets expect the central bank to hold rates steady in October, with a December hike still possible, according to CME FedWatch.

In individual movers, Starbucks fell 3.3% after media reports the coffee chain explored a takeover of Chipotle Mexican Grill. Shares of the burrito chain rose 6.6%.

Palantir climbed 2.9% after Goldman Sachs upgraded its rating on the data analytics software provider to "buy" from "neutral."

Declining issues outnumbered advancers by a 2.18-to-1 ratio on the NYSE and by a 2.83-to-1 ratio on the Nasdaq.

The S&P 500 posted 4 new 52-week highs and 12 new lows, while the Nasdaq Composite recorded 19 new highs and 223 new lows. — Reuters