Stock futures sink after rally; oil prices tumble

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U.S. stock futures declined Wednesday after a relief rally as investors continue to grapple with uncertainty and recession fears. Oil prices also fell sharply.

The Dow Jones industrial average fell 316 points, or 1 percent, in premarket trading, while S&P 500 futures shed 1.2 percent and the tech-heavy Nasdaq futures dropped 1.3 percent.

Oil prices sank after the White House signaled a new plan to cool soaring fuel prices, which have been hovering near $5 a gallon, on average, nationwide. On Wednesday, President Biden will urge Congress to suspend the federal gas tax of 18.3 cents per gallon for three months. He will also call on states to suspend their own gas taxes and ask oil companies to lower prices.

Brent crude, the international benchmark, dropped 4 percent to trade near $110 a barrel Wednesday. West Texas Intermediate crude, the U.S. benchmark, dropped 4.6 percent.

In the bond market, yields on the benchmark U.S. 10-year treasury dived by more than .1. Yields move in opposite directions to bond prices.

Stocks bounced Tuesday, with the Dow climbing more than 600 points on the first trading day following Wall Street’s worst week since March 2020. Both the S&P 500 and Nasdaq added more than 2.5 percent.

Investors are attempting to navigate an economy where inflation has surged to a 40-year high and the Federal Reserve has been aggressively raising interest rates — including a three-quarters of a percentage point jump last week, its largest increase since 1994. Fed Chair Jerome H. Powell will testify before Congress on Wednesday to address that decision and reiterate the central bank’s efforts to rein in inflation.