Investors look to kick off October on a positive note after September’s dismal losses, with Friday’s non-farm payrolls report in focus.
Dow Jones Industrial Average futures ticked higher Monday as Wall Street looked to start the new month, and quarter, on a more solid note, and also looked ahead to fresh economic data for signs of whether the Federal Reserve might soften its stance on tightening rates to combat inflation.
As of 7:30 am ET, Dow futures traded 91 points higher, or 0.3%. S&P 500 futures rose 0.1%, and Nasdaq 100 futures dipped 0.3%. Benchmark 2-year notes were pegged at 4.262% in early New York trading, while the yield on the benchmark 10-year Treasury note ticked down to 3.787% from 3.802% Friday. Yields and prices move inversely.
Stocks ended the day Friday staunchly in the red, with the Dow and S&P 500 notching their biggest monthly losses since March 2020. The Dow Jones Industrial Average lost 500 points on Friday, or 1.71%, falling to 28,725. S&P 500 ended down 1.51%, while the tech-focused Nasdaq slipped 1.51%.
For September, the Dow shed 8.8%, while the S&P 500 and Nasdaq Composite lost 9.3% and 10.5%, respectively. The Nasdaq had a particularly tough month-end, hitting fresh 2022 lows as extended declines for both Tesla and Apple pulled the benchmark sharply lower.
Things were looking a shade brighter to kick off October, however, with Dow futures up 91 points, or 0.3%. S&P 500 futures were up 0.1%, while Nasdaq 100 futures were down 0.3%, still weighed by Tesla (TSLA) – Get Tesla Inc. Report as well as Apple (AAPL) – Get Apple Inc. Report.
Stocks Mixed, Credit Suisse, Tesla, OPEC+, and Jobs Friday In Focus – Five Things To Know
In premarket trading, shares of Tesla slipped 4.4% after quarterly vehicle deliveries for the electric-car maker fell short of analysts’ forecasts.
Weakness in Tesla spilled over to its other rate-sensitive peers including Apple and Amazon.com (AMZN) – Get Amazon.com Inc. Report, both of which were down 0.4% each.
Overseas, the pan-continental Stoxx Europe 600 declined 1.4%. Shares of Credit Suisse (CSGKF) tumbled 8.5%. The Swiss bank tried to assuage fears about its health in a memo to employees and in a round of phone calls to investors and clients over the weekend.
The British pound recovered from earlier losses against the U.S. dollar after the U.K. government abolished a plan that would reduce taxes on high earners. Sterling last traded 0.1% higher against the dollar at $1.117.
To be sure, inflation prospects, as well as planned central bank rate hikes, remain the market’s central concern, with several economic reports on investors’ radars this week, culminating with Friday’s non-farm payrolls report.
Economists are expecting the U.S. economy to have created 250,000 jobs last month, with the unemployment rate holding steady at 3.7% and wage growth staying elevated.
Another strong jobs report could reinforce the case for even more hawkishness from the Fed, potentially roiling markets already hard hit by worries over how high rates may have to rise as the central bank battles the worst inflation in 40 years.
On the other hand, indications that the labor market is slowing could stoke fears that aggressive Fed tightening risks tipping the economy into a recession.
Meantime, several Fed officials are also due to speak during the week, including New York Fed President John Williams, Atlanta Fed President Raphael Bostic, Chicago Fed President Charles Evans, San Francisco Fed President Mary Daly, and Cleveland Fed President Loretta Mester.
The next Federal Open Market Committee meeting takes place in November. Investors currently anticipate the central bank will lift its benchmark fed funds rate by another 75 basis points.
