And before Wednesday trade kicks off, let's see how trade is shaping up. Over in Chicago, fintech TV correspondent Mark Payton is live from the trading floor. Good morning Mark. Thank you so much for joining us. So a lot going on pre market in this holiday shortened week. So give us a sense of what you're watching and what you're hearing from the trading floor.
Good morning Rami. Yeah we're seeing some pressure on stocks as we get things going this morning. S&P futures are down about 4/10 of a percent with oil and interest rates really driving a lot of the conversation today here at CBO. We're also watching the VIX. It's around 16.32. Remember the VIX gives us a sense of how much S&P 500 volatility the options market is expecting over the next 30 days.
With oil and rates both moving higher in significant inflation numbers due this week. We'll see if option traders start pricing in a little more volatility. The Russell 2000 closed yesterday around 2900. The Russell gives us a better sense of what's happening beyond those big names that can really drive the major indexes.
If we start seeing small caps joining in, that's generally a healthier sign for the broader market. If they continue to lag, it tells you investors are still being pretty selective about where they're putting their money.
Yeah. And Mark, another area of the market we're paying attention to is energy, in particular oil prices amid rising tensions in the Middle East. And we saw Brant futures cross that $100 a barrel mark this morning. So how are traders reacting to this.
Yeah this is really the big story this morning. Brant crude is around $100.85 a barrel, up 3% after crossing that 100 mark for the first time since July. A lot of this is being driven by the escalating conflict in the Middle East and concerns about global oil supplies. But here is where it becomes much bigger market story.
Higher oil can mean more inflation pressure. And we're seeing that concern show up in the bond market as well. Take a look at the ten year Treasury yield. It's around 4.81%, which puts it near the highest level in almost three years. So you start connecting the dots here. Oil stays higher. That can keep inflation elevated.
Yields stay higher. And that makes the Fed's job a lot more difficult. Markets are now pricing in about a 62% chance of a quarter point rate hike next week. And the timing here is important because we get PPI tomorrow and CPI on Friday. The last major inflation readings before the fed makes that decision.
So oil may be grabbing the headlines this morning. But what happens with inflation and rates could ultimately be the bigger story for this market.
Yeah Mark. Indeed we are counting down to those inflation numbers this week as well as the Fed reserve meeting next week. So appreciate your insights this morning. Thank you so much for joining us from Chicago.
Great.
Thank you.
