U.S. equity futures slipped lower Thursday, with investors again tracking minute-by-minute moves in the bond market ahead of another key jobs report that could stoke further inflation concerns.
A pullback in Treasury yields yesterday, sparked by a weaker-than-expected reading for private sector hiring over the month of September from payroll processing group ADP, helped stocks on Wall Street book solid gains, with the S&P 500 rising more than 34 points, or 0.81% on the session and the Dow returning to positive territory for the year.
A big slump in global oil prices, which followed data from the Energy Department showing a pullback in gasoline demand, and a 5.2 million barrel increase in crude products, and sent Brent crude more than $5 a barrel lower on the session, added to the bullish tone.
WTI crude futures for November delivery were marked another $1.47 lower at $82.74 per barrel in overnight trading, while Brent contacts for December, the global pricing benchmark, fell $1.32 to $84.49 per barrel.
However, overnight moves in bonds suggest yesterday’s rally could be tested again today as stocks aren’t yet responding to another slide in yields. Benchmark 10-year note yields edge modestly lower, to 4.719%, in the overnight session. Benchmark 2-year notes were last seen trading at 5.029% while the U.S. dollar index held at a near 10-month high of 106.794 against a basket of its global peers.
The market’s key volatility gauge, the CBOE’s VIX index, was also on the back foot, slipping 5.5% in after-hours trading to around 18.69 points, down from the multi-month high of 19.95 points it reached earlier this week.
On Wall Street, focus will turn once again to job market data, with the Bureau of Labor Statistics set to report its weekly estimate of new applications for unemployment benefits at 8:30 am Eastern time. The BLS’s formal September employment report is slated to the same time on Friday.
Futures contracts tied to the S&P 500, which is down 0.57% for the month, are indicating a 10 point opening bell decline while those linked to the Dow Jones Industrial Average suggest an 83 point pullback.
The tech-focused Nasdaq is set to open around 30 points lower.
In Europe, the Stoxx 600 was marked 0.28% higher in early Frankfurt trading while the FTSE 100 added 0.51% in London.
Overnight in Asia, the solid rally on Wall Street flowed-through to the Nikkei 225, which rebounded from a four-month low to rise 1.8% on the session.
The region-wide MSCI ex-Japan benchmark, meanwhile, ended 0.57% higher on the final day of China’s Golden Week holiday celebrations.
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