S&P 500 and Nasdaq 100: Rising Treasury Yields Weigh on Stock Futures Today

Stock Futures Dip as October’s Weak Start Continues

Stock futures fell on Monday, continuing a sluggish start to October as Wall Street struggles to build on last week’s rally. Weighing on futures were rising U.S. Treasury yields and higher oil prices, both adding uncertainty to market sentiment.

At 13:07 GMT, Dow futures are trading 42490.00, down 156.00 or -0.37%. S&P 500 Index futures are at 5777.75, down 22.25 or -0.38% and Nasdaq futures are trading 20122.50, down 104.75 or -0.52%.

The benchmark 10-year Treasury yield climbed nearly 3 basis points to 4.008%, marking its highest level since August. Additionally, U.S. crude oil prices surged over 2%, reaching more than $76 per barrel amid heightened tensions in the Middle East.

Despite these pressures, the major indexes managed modest gains in the prior week. The S&P 500 edged up 0.2%, the Nasdaq Composite rose 0.1%, and the Dow Jones Industrial Average also added 0.1%. This marked the fourth consecutive winning week for all three indexes, bolstered by Friday’s stronger-than-expected jobs report. The report fueled optimism that the Federal Reserve might achieve a “soft landing” for the economy. The Dow even closed at a record high following the data.

Economic Data and Earnings in Focus

Looking ahead, traders will closely watch key economic indicators this week, including the Federal Reserve’s meeting minutes on Wednesday and the U.S. consumer price index (CPI) report on Thursday. These releases will provide further insight into inflation and the Fed’s potential actions. The earnings season also kicks off, with Delta Air Lines and JPMorgan Chase among the first major companies to report results on Thursday and Friday, respectively.

Market volatility may remain elevated, according to Truist Wealth co-chief investment officer Keith Lerner. He pointed to upcoming political uncertainty, including the looming U.S. presidential election and potential surprises in October, as reasons for traders to stay cautious in the near term.

Stocks in Focus: Apple, Amazon, Pfizer

Several high-profile stocks were active in premarket trading. Apple shares dipped 1.4% after Jefferies downgraded the tech giant to hold from buy, citing weaker-than-expected demand for its upcoming iPhone models.

Amazon also faced pressure, slipping nearly 2% after Wells Fargo downgraded the stock, highlighting concerns over slowing growth and rising competition from Walmart.

Conversely, Pfizer shares rose almost 3% on news that activist investor Starboard Value has taken a $1 billion stake, aiming to drive a turnaround at the company.

Bullish S&P 500 Target Maintained

Despite recent market volatility, Oppenheimer Asset Management reiterated its bullish stance on equities, maintaining a year-end target of 5,900 for the S&P 500. This is 2.6% above Friday’s closing level of 5,751.07. Oppenheimer’s chief strategist John Stoltzfus noted that pullbacks in the market have been more like “trims” as investors continue to buy dips, driven by strong earnings and the Federal Reserve’s success in managing inflation so far.

Market Forecast

In the near term, traders should remain cautious as rising Treasury yields and geopolitical tensions could weigh on market sentiment. However, with solid economic data and corporate earnings, the outlook remains cautiously bullish. Strong job growth and reduced recession risks, as noted by Goldman Sachs, provide support for continued upward momentum in equities, though volatility is likely to persist as inflation data and Fed actions remain key variables.