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Treasury Yields Extend Gains as Equities Brace for September Jobs Report
US equity futures advanced modestly as the new trading month began, following a challenging September for the S&P 500 and Dow. Elevated Treasury yields, with the 10-year exceeding 5.3% and the 30-year topping 5.6%, weighed on investor sentiment…
US equity futures showed modest gains Wednesday evening as Wall Street prepared for the new trading month. Dow Jones Industrial Average futures added 99 points, a 0.2% increase, while S&P 500 futures advanced approximately 0.3%. Nasdaq-100 futures also gained 0.2%.
During regular trading, the S&P 500 declined 0.3%, and the Dow shed over 440 points, or 0.9%. The Nasdaq Composite, however, posted a 0.2% gain.
September proved challenging for equities. The S&P 500 fell 0.5%, driven by rising oil prices and surging Treasury yields, which reignited concerns about additional rate hikes. The Dow concluded the month down 4.3%, while the Nasdaq outperformed with a 1.9% advance. For the third quarter, the S&P 500 and Nasdaq each climbed about 2%, contrasting with the Dow's 2.7% loss.
Investors began the new month balancing softer inflation figures against persistently high Treasury yields and uncertainty surrounding the Federal Reserve's October rate decision. Corporate earnings are also a key focus. Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute, noted that while these factors present headwinds, corporate earnings have shown resilience. The critical question remains whether this earnings strength can persist amid elevated borrowing costs.
Treasury yields continued to climb even after the August personal consumption expenditures price index, a key inflation metric, registered 3.4% over the past 12 months, falling below the Dow Jones consensus forecast of 3.7%. The 10-year Treasury yield surpassed 5.3% at one point on Wednesday, nearing 2007 highs, while the 30-year yield exceeded 5.6%, its highest level since 2002. Markets now anticipate Thursday’s initial jobless claims data and Friday’s September jobs report.
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