Wall Street is heading for a softer start to the week after Friday’s rally, with rising crude prices, higher Treasury yields and renewed Middle East tension pulling futures lower.
Futures point down
Ahead of the opening bell, S&P 500 futures were down about 0.4 percent and Dow futures had slipped roughly 0.3 percent. Early-morning quotes showed S&P futures near 7,775, Dow futures around 51,900 and Nasdaq futures down about 0.6 percent. Pre-market trading in exchange-traded funds showed a similar pattern, with the fund tracking the Nasdaq-100 leading the decline, down close to 1 percent, as investors rotated out of high-growth technology and toward energy and consumer staples. Global benchmarks are mixed despite Wall Street’s rally finish last week +2
What lifted stocks on Friday
The weakness follows a strong finish to last week. U.S. stocks closed out their first winning week in three. A slide in crude oil and positive developments around U.S.-China presidential meetings lifted confidence, despite climbing government bond yields. The Dow Jones Industrial Average rose 0.9 percent, or 478.64 points, to 51,828.62, and the Nasdaq Composite gained 0.5 percent to 27,068.72. Microchip Technology was the top performer on the Nasdaq, jumping 5.4 percent. The benchmark S&P 500 also rose 0.5 percent. Global benchmarks are mixed despite Wall Street’s rally finish last week +2
One analyst quoted by The Street noted that Wall Street remains within touching distance of record highs, supported by tech stocks. The Street
Oil and Iran take center stage again
The mood shifted over the weekend. Bloomberg reported that stocks and bonds fell as Middle East tensions flared after President Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, denting the optimism built late last week on expectations of a phased deal. Bloomberg
Early quotes showed U.S. crude up about 3 percent near $95 a barrel, gold futures down about 3 percent near $4,190 an ounce, Bitcoin off about 1.7 percent near $83,400, and the VIX volatility gauge up 8 percent to about 16. Yahoo Finance
Bond yields keep pressure on valuations
Treasuries also sold off. The two-year yield rose five basis points to 4.90 percent, and the 10-year yield added four basis points, erasing Friday’s decline. The 10-year closed at 5.17 percent on Sept. 25, according to Treasury data. Yields at these levels matter for equities because they raise the return investors can earn without taking market risk and increase borrowing costs for companies. The five-year yield touched 5 percent last Wednesday for the first time since 2007, a sign of how far borrowing costs have moved. Stock Market Today: Dow, S&P Live Updates for September 28 – Bloomberg +2
Global markets mixed
In early European trading, Britain’s FTSE 100 rose 0.3 percent to 10,725.57, France’s CAC 40 gained 0.3 percent to 8,097.99 and Germany’s DAX added 0.2 percent to 25,464.53. In Asia, Japan’s Nikkei 225 fell 0.7 percent to 65,877.62 and Australia’s S&P/ASX 200 added 0.2 percent to 8,679.70. South Korea’s Kospi dropped 2.70 percent, while Hong Kong’s Hang Seng rose 0.54 percent. BNN Bloomberg Al Jazeera
Corporate news and the week ahead
Nvidia shares gained about 1.2 percent in pre-market trading after the chipmaker announced a $150 billion increase to its buyback program. Investors also await Micron Technology’s earnings on Wednesday for a read on AI infrastructure demand. Wednesday also marks the end of the third quarter, a date that often brings portfolio rebalancing. Guru Focus Stocktwits
Inflation and jobs data due later this week will add to the picture, and the Federal Reserve’s next policy meeting follows on Oct. 27-28. The Fed raised rates to a range of 3.75 percent to 4.00 percent this month. Mortgage Daily U.S. Bank
What investors should watch
The direction of the market this week may hinge on two variables: oil and yields. If crude keeps climbing on the Hormuz standoff, inflation worries could push yields higher and weigh on richly valued growth stocks. If talks produce even a modest opening, Friday’s relief rally could resume.
Traders are also watching whether the tech-led gains of recent weeks broaden out. One daily market note described a “risk-off” tape but said money was still flowing into technology and communication services on a weekly basis. Whether that rotation survives an oil shock is the question of the week. Substack
