Monday saw a slight decline in December S&P 500 futures and December Nasdaq 100 E-Mini futures by 0.05% and 0.12% respectively, as the U.S. 10-year yield approached a 15-year peak. This comes amid anticipation of the Federal Reserve's preferred inflation measure and comments from Fed officials.
In the previous trading session, Wall Street's major averages closed in negative territory, with the S&P 500 hitting a 3-1/4 month low and the Dow Jones Industrial Average reaching a 2-1/4 month low. Scholastic (NASDAQ:SCHL) Corporation's shares fell over 13% after Q1 results disappointed, while Tyson Foods Inc (NYSE:TSN) slid more than 3% following HSBC's Reduce rating. On the positive side, Ford Motor Company (NYSE:F) saw its stock rise over 1% on news of significant progress in talks with the United Auto Workers union. Chinese firms listed in the U.S. also made gains after Washington and Beijing announced working groups to discuss financial and economic issues.
Released on Friday, U.S. S&P Global manufacturing PMI for September exceeded expectations at 48.9, against predictions of 48.0. However, the U.S. S&P Global Services PMI for September dropped to an eight-month low of 50.2, weaker than anticipated.
Federal Reserve officials have hinted at potential future interest rate hikes, with Fed Governor Michelle Bowman leaning towards further increases, Boston Fed President Susan Collins stating that more hikes were not off the table, and San Francisco Fed President Mary Daly stressing the central bank's commitment to careful inflation management.
The probability of a rate increase at the November and December central bank meetings is priced into U.S. rate futures at 25.5% and 35.5% respectively. In the following week, the market focus will be on the August reading of the U.S. core personal consumption expenditures price index, the Fed's preferred inflation measure. Other significant forthcoming economic data include the U.S. Building Permits, S&P/CS HPI Composite - 20 n.s.a., and CB Consumer Confidence.
Market participants are also awaiting speeches from Fed officials Kashkari, Bowman, Goolsbee, Cook, Barkin, and Williams. Federal Reserve Chair Jerome Powell is slated to host a town hall with educators on Thursday.
Companies including Micron Technology (NASDAQ:MU), Costco (NASDAQ:COST), Nike , and Carnival (NYSE:CCL) are expected to release their quarterly results this week. However, Monday's U.S. economic data slate will be mainly empty.
In overseas markets, the Euro Stoxx 50 futures fell by 0.92%, influenced by investor concerns over sustained high-interest rates and worries about China's economic growth. ECB Governing Council member Francois Villeroy de Galhau advised caution regarding excessive interest rate hikes, while ECB President Christine Lagarde is also set to give a speech.
Asian stock markets showed mixed performance with China's Shanghai Composite Index closing down by 0.54% due to renewed concerns over China's property developers and negative sentiment towards the Chinese economy. Japan's Nikkei 225 Stock Index closed up by 0.85%, snapping a four-day losing streak as investors picked up beaten-down stocks.
Pre-market movements in U.S. stocks included Nike Inc (NYSE:NKE).'s over 1% drop after a downgrade from Jefferies and Sealed Air (NYSE:SEE) Corporation's more than 1% rise following an upgrade from Citi.
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