US equity futures fell on Thursday as a massive rally to start the month subsided, with rates rising again.
Dow Jones Industrial Average futures fell 152 points, or 0.5%. S&P 500 futures slid 0.5% and Nasdaq 100 futures fell 0.5%.
The benchmark 10-year rate climbed more than 1 basis point to 3.773%. The 2-year rate, which is more sensitive to changes in monetary policy, rose by 2 basis points to 4.14%.
Wall Street started the week on a high, with the S&P 500 staging its biggest two-day rally since 2020. Stocks fought to maintain the winning streak on Wednesday, but ultimately failed. The Dow Jones closed down about 42 points, or 0.14%. The S&P 500 and the Nasdaq Composite fell 0.20% and 0.25% respectively.
“Few are convinced that the recent move is more than a bear market rally, with skepticism about sustainability,” said Mark Hackett, head of investment research at Nationwide. “Confidence remains low, ranging from CEOs, small businesses, consumers and investors. Universal pessimism is bullish from an opposite view, although the timing of the swing of the pendulum is difficult to predict.”
Investors continue to watch economic data to see if inflation is slowing or if the Federal Reserve’s rate hikes are pushing the United States closer to a recession.
ADP data showed the labor market remained strong among private businesses in September, when companies added 208,000 jobs. This exceeded the Dow Jones estimate of 200,000 jobs. On Friday, the Bureau of Labor Statistics’ September jobs report will be released, giving the central bank and investors another piece of data.
Some companies also declare profits. On Thursday, Constellation Brands will report earnings before the opening bell, and Levi Strauss will report after the market closes.