Monday October 3rd


Dow futures rise as Wall Street tries to recover from tough September

U.S. stock markets index futures moved higher Monday as Wall Street tried to start the new month, and quarter, on a solid note. Dow futures jumped 311 points higher, or 1.1%. S&P 500 futures rose 1%, and Nasdaq 100 futures gained 0.7%. Those moves came as the yield on the 10-year U.S. Treasury note continued to fall, after finishing the previous week 18 basis points down from its mid-week high. “It’s pretty simple at this point, 10-year Treasury yield goes up, and equities likely remain under pressure,” Raymond James’ Tavis McCourt said. “It comes down, and equities rally.” Wall Street is coming off a tough month, with the Dow and S&P 500 notching their biggest monthly losses since March 2020. The Dow on Friday also closed below below 29,000 for the first time since November 2020. The Dow shed 8.8% in September, while the S&P 500 and Nasdaq Composite lost 9.3% and 10.5%, respectively. For the quarter, the Dow fell 6.66% to notch a three-quarter losing streak for the first time since the third quarter of 2015. Both the S&P and Nasdaq Composite fell 5.28% and 4.11%, respectively, to finish their third consecutive negative quarter for the first time since 2009. As the new quarter kicks off, all S&P 500 sectors sit at least 10% off their 52-week highs. Nine sectors finished the quarter in negative territory. In the fourth quarter, elevated inflation and a Federal Reserve intent on bringing surging prices to a halt regardless of what it means for the economy will likely continue to weigh on markets, said Truist’s Keith Lerner. Oversold conditions, however, also make the market vulnerable to a sharp short-term bounce on good news, he added. “I think we could be set up for some type of reprieve but the underlying trend at this point is still a downward trend and choppy waters to continue,” Lerner said. On the economic front, Markit PMI and ISM manufacturing data are slated for release on Monday along with construction spending. Shares in the Asia-Pacific were mixed on Monday as markets enter the last quarter of the year. Hong Kong’s Hang Seng index was 0.97% down in the final hour of trade, after reaching the lowest levels since October 2011, according to Refinitiv Eikon data. In Australia, the S&P/ASX 200 gave up early gains and closed 0.27% lower at 6,456.90. The Nikkei 225 in Japan gained 1.07% to 26,215.79, while the Topix index was 0.63% higher at 1,847.58. China markets are closed for the Golden Week holiday, and South Korea’s market is also closed. Oil prices jumped Monday as OPEC+ considers reducing output by more than 1 million barrels per day (bpd) to buttress prices with what would be its biggest cut since the start of the Covid-19 pandemic. Brent crude futures rebounded $3.26, or 3.8%, to $88.40 a barrel. U.S. West Texas Intermediate crude was up 4.2%, or $3.33, at $82.82 per barrel. Gold prices edged higher on Monday, although the gains were capped on fears of aggressive rate hikes by the U.S. Federal Reserve. Spot gold was up 0.3% at $1,664.50 per ounce. U.S. gold futures were steady at $1,673.20. The dollar steadied against its rivals.