Wall Street looked to rebound from its lowest closing levels in nearly two months Friday, with U.S. equity futures nudging higher ahead of key activity data and a host of speeches Federal Reserve policymakers that could clarify market bets on the path of interest rates into the end of the year.
Stocks closed at the lowest levels since late June last night, with tech leading the declines, as markets re-set their assumptions of a ‘higher for longer’ Fed rate path following Wednesday’s policy decision and a series of hawkish comments from Chairman Jerome Powell.
A surprise decline in weekly jobless claims, which fell to a March low of 201,000, added to concerns that a tight labor market, rising crude oil prices and a robust economy would stoke inflation pressures into the autumn months and compel the Fed to execute at least one more rate hike at either its November or December meetings.
Benchmark 10-year Treasury note yields tested a fresh 2007 high of 4.5% both yesterday and in the overnight session before easing to 4.480% in early New York dealing, while 2-year notes we% in tore pegged at 5.141% ahead of S&P Global’s manufacturing and services PMI readings for the month of September at 9:45 am Eastern time.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.25% higher at 105.629 as the yen slid to a multi-month low of 148.28 following a dovish Bank of Japan rate decision.
Markets will also closely track speeches from Fed Governor Lisa Cook, as well as Minneapolis Fed President Neel Kashkari, later in the session.
On Wall Street, with stocks heading to their worst week since early March after hitting their third quarter low last night, futures tied to the S&P 500 were priced for a modest 6 point bump.
Futures tied to the Dow Jones Industrial Average were indicating a 5 point dip while those linked to the tech-focused Nasdaq were suggesting a 53 point opening bell gain.
In other markets oil prices were back on the march in overnight trading, as well, with Brent crude futures for November delivery rising 93 cents to $94.23 per barrel amid ongoing supply concerns linked in part to a new fuel export ban put in place by Russia earlier this week.
WTI futures for the same month, which are tightly-linked to U.S. gas prices, were up $1.13 to $90.76 per barrel.
Overnight in Asia, the region-wide MSCI ex-Japan benchmark gained 0.89% into the close of trading, while Japan’s Nikkei 225 fell 0.5%.
In Europe, the Stoxx 600 was marked 0.2% lower in early Frankfurt trading, while Britain’s FTSE 100 gained 0.64% in London.
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