US stock futures were broadly unchanged on Monday as markets awaited September services activity data and continued to assess the outlook for Federal Reserve interest rates following recent volatility in Treasury yields.
The benchmark 10-year Treasury yield was little changed after recently climbing to multi-decade highs.
The Institute for Supply Management is due to publish its September services sector report shortly after the start of trading. Economists expect the services PMI to ease to 55.0 from 55.4 in August, with any reading above 50 indicating an expansion in activity.
“Another strong activity reading could revive the “good news is bad news” dynamic and push yields higher again, while evidence of moderation would reinforce the case for the Fed to wait,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
Markets are also awaiting minutes from the Federal Reserve’s latest monetary policy meeting on Wednesday for further indications about policymakers’ views ahead of the central bank’s next meeting later this month.
CME Group’s FedWatch Tool showed an 80.6% probability of interest rates remaining unchanged following Friday’s weaker-than-expected US employment report.
US Indices Closed Higher on Friday
Wall Street finished higher on Friday after initially recording larger gains following the September employment report.
The Nasdaq climbed 319.27 points, or 1.2%, to 27,190.86. The S&P 500 gained 56.27 points, or 0.7%, to 7,722.72, while the Dow Jones Industrial Average added 250.40 points, or 0.5%, to finish at 51,176.96.
The weekly performance was mixed. The Nasdaq gained 0.5%, while the S&P 500 declined 0.3% and the Dow lost 1.3%.
US non-farm payrolls increased by 29,000 in September, according to the Labor Department, below economists’ forecast for an increase of 85,000. August’s employment gain was revised down to 133,000.
The unemployment rate increased to 4.2% from 4.1%, compared with expectations for no change.
Treasury yields fell following the employment figures as expectations for another Federal Reserve rate increase later this month declined, although yields subsequently reversed part of that move.
Oil Falls While Semiconductor Stocks Advance
Crude oil ended Friday down 1.9% after the Group of Seven confirmed plans to release diesel and crude reserves. Prices nevertheless finished above their lows for the session.
Semiconductor stocks were among the stronger areas of the equity market, with the Philadelphia Semiconductor Index advancing 2.4% to a three-month closing high.
Networking stocks also gained, with the NYSE Arca Networking Index rising 2.2%. Transportation and computer hardware stocks advanced, while airline shares came under pressure during the session.
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