U.S. stock futures meandered with mildly fluctuating Treasury yields early Thursday, amid signs the bond market sell-off was abating.
How are stock-index futures trading
-
S&P 500 futures
ES00,
-0.42%
dipped 4 points, or 0.1%, to 4294 -
Dow Jones Industrial Average futures
YM00,
-0.40%
fell 45 points, or 0.1%, to 33281 -
Nasdaq 100 futures
NQ00,
-0.44%
eased 16 points, or 0.1%, to 14908
On Wednesday, the Dow Jones Industrial Average
DJIA
rose 127 points, or 0.39%, to 33130, the S&P 500
SPX
increased 34 points, or 0.81%, to 4264, and the Nasdaq Composite
COMP
gained 177 points, or 1.35%, to 13236.
What’s driving markets
Equity-index futures trading continued to be led by moves in the U.S. Treasury market, as traders parse economic data to determine the Federal Reserve’s policy trajectory.
Ten-year Treasuries were little changed on Thursday, but consider the previous two sessions. The S&P 500 fell 1.4% on Tuesday as the 10-year Treasury yield hit a fresh 16-year high around 4.8% when the JOLTS survey showed a robust labor market.
Then on Wednesday the Wall Street stock benchmark rose 0.8% after a softer-than-expected ADP employment report helped push 10-year yields down from an early session high around 4.87% to finish the day around 4.73%.
“One [piece of] good news for the U.S. jobs market, and one bad news. Everyone is now holding his or her breath into Friday’s jobs data, which will determine whether we will end this week with a sweet or a sour taste in our mouth,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“Sweet would be loosening jobs data, sour would be a still-strong jobs data which would fuel the hawkish Fed expectations and further boost U.S. yields…[which] are at a critical moment,” she added.
Before that traders must contend with some U.S. economic updates set for release on Thursday, including the weekly initial jobless claims data and the trade deficit for August, both due at 8:30 a.m. Eastern.
There’s also more Fedspeak, including Cleveland Fed President Loretta Mester talking at the Chicago Payments Symposium at 9 a.m., and San Francisco Fed President Mary Daly making comments at noon in New York.
After the choppy trading of recent days, during which the CBOE VIX index
VIX,
a gauge of expected volatility, hit 20 for the first time in four months, the S&P 500 was likely to rally in the short term, according to Mark Newton, technical analyst at Fundstrat.
“U.S. equity markets should be nearing an area of support, and Treasury yields and more meaningful rallies might begin for both equity indices and Treasuries starting next week, potentially coinciding with weaker economic data and/or more evidence of FOMC pausing their rate hikes,” said Newton.
This post was originally published on Market Watch
