S&P 500 futures rose about 0.56% early Thursday as traders opened October weighing elevated Treasury yields against a softer inflation reading. The index had dropped 0.3% in Wednesday's regular session, capping a weak September, with investors now awaiting weekly jobless claims and Friday's September jobs report.
S&P 500 futures advanced about 0.56% early Thursday, extending gains into a new trading month. Dow Jones Industrial Average futures added 170 points, or 0.33%, and Nasdaq-100 futures gained over 1%.
The moves followed a weaker regular session Wednesday, when the S&P 500 dropped 0.3% and the Dow lost more than 440 points, or 0.9%. The Nasdaq Composite bucked the trend, advancing 0.2% on the day.
September closes out as a weak month
September, historically a soft month for stocks, lived up to its reputation. The S&P 500 dropped 0.5% for the month, while the Dow lost 4.3%.
The Nasdaq outperformed both, gaining 1.9% in September. Wednesday also marked the end of the third quarter: the S&P 500 and the Nasdaq each advanced about 2%, while the Dow lost 2.7% over the quarter.
Investors grappled with higher oil prices and a surge in Treasury yields through the month, which stoked fears of additional rate hikes. The 10-year Treasury yield breached 5.3%, trading near 2007 highs, while the 30-year yield surpassed 5.6%, its highest level since 2002.
Cooler inflation offers a partial offset
Yields crept higher even as the personal consumption expenditures price index for August came in lighter than expected, rising 3.4% over the prior 12 months versus a Dow Jones consensus call for 3.7%. That gives the Federal Reserve some room before its next rate decision, due at the end of October.
According to Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute: "corporate earnings have continued to show resilience", though she added that the question is whether that strength can continue as borrowing costs stay elevated.
Investors now turn to initial jobless claims, due Thursday at 8:30 a.m. ET, followed by Friday's September jobs report. Nike reports earnings after Thursday's close.
Source: US Top News and Analysis
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