Wednesday October 5th


Dow futures fall more than 270 points following a sharp two-day rally on Wall Street

U.S. stock markets index futures fell on Wednesday, putting Wall Street on track to give back some of its sharp gains from the last two sessions. Dow Jones Industrial Average futures declined by 278 points, or 1%. S&P 500 and Nasdaq 100 futures dipped 1% and 0.9%, respectively. Treasury yields rebounded Wednesday, weighing on stocks. The 10-year rate traded 7 basis points higher at 3.697% after briefly dipping below 3.6% in the previous session. Payroll services firm ADP issued its jobs report, which showed the addition of 208,000 jobs in September, which is better than expected by Dow Jones estimates. Traders are still looking ahead to Friday’s release of the nonfarm payrolls report. The Dow on Tuesday jumped about 825 points, or 2.8%. The S&P 500 gained nearly 3.1%, while the Nasdaq Composite advanced 3.3%. Those gains, which come on the back of falling bond yields, led to the strongest two-day stretch for the S&P 500 since 2020. Meanwhile, a weakening in the most recent job openings data had some investors considering whether the Federal Reserve will slow the pace of interest rate hikes. Market participants wondered whether those signs could mean markets have finally priced in a bottom after the sharp declines in the prior quarter. “I don’t think you have to worry about a recession until the second half of ’23,” Stifel chief equity strategist Barry Bannister said Tuesday on CNBC’s “Closing Bell: Overtime.” “So there is room for a rally as you go into the early part of next year.” Shares in the Asia-Pacific traded higher on Wednesday after U.S. stocks rallied for a second day. Hong Kong’s Hang Seng index surged to close 5.9% higher at 18,087.97 on its return after a holiday Tuesday. The Hang Seng Tech index soared 7.54% higher. The Nikkei 225 in Japan rose 0.48% to close at 27,120.53, while the Topix added 0.32% to 1,912.92. In South Korea, the Kospi was up 0.26% at 2,215.22 and the Kosdaq gave up early gains to close 1.64% lower at 685.34. Inflation in South Korea slowed slightly in September, according to official data released Wednesday. Mainland China markets remain closed for the Golden Week holiday, and India’s stock market is also shut for a holiday. Oil prices inched up on Wednesday extending 3% gains in the previous session ahead of a meeting of OPEC+ producers to discuss a big output cut in what energy executives and analysts see as a tightly supplied market. Brent crude rose 11 cents to $91.91 a barrel at 0001 GMT, after climbing $2.94 in the previous session. U.S. West Texas Intermediate crude futures picked up 5 cents to $86.57 a barrel after gaining $2.89 in the previous session. The Organization of the Petroleum Exporting Countries and allies led by Russia, together called OPEC+, meeting in Vienna later on Wednesday, are discussing output cuts as big as 2 million barrels per day (bpd), an OPEC source told Reuters. Gold prices eased on Wednesday as the dollar somewhat stabilized from its drop in the previous session, although bullion held above key $1,700-per-ounce level with investors eyeing more clarity on the U.S. Federal Reserve’s future policy stance. Spot gold was down 0.2% at $1,722.69 per ounce, as of 0120 GMT, but was not far from $1,729.39, its highest level since Sept. 13 scaled on Tuesday. U.S. gold futures were flat at $1,731.70. The dollar index crawled 0.1% higher, after the unit shed 1.3% overnight to its biggest drop since March 2020.