Stock futures rise heading into first full week of trading in October

Finance

Traders work on the floor of the New York Stock Exchange (NYSE) on September 30, 2021 in New York City.
Spencer Platt | Getty Images

U.S. stock futures were higher in overnight trading on Sunday as investors readied for the first full week of trading in October and the fourth quarter.

Dow futures rose about 100 points. S&P 500 futures gained 0.3% and Nasdaq 100 futures climbed 0.35%.

Friday marked the first trading day of October and the final quarter of 2021. The major averages rose that day on news of a new oral treatment for Covid-19, which boosted stocks tied to the economic reopening.

The market rebound followed a rough September plagued by fears of inflation, Federal Reserve tapering and rising interest rates. The 10-year rate topped 1.56% last week, its highest point since June.

The S&P 500 finished the month down 4.8%, breaking a seven-month winning streak. The Dow and the Nasdaq Composite fell 4.3% and 5.3%, respectively, suffering their worst months of the year.

The fourth quarter is typically a good period for stocks, but overhangs like central bank tightening, the debt ceiling, Chinese developer Evergrande and Covid-19 could keep investors cautious. Heading into the fourth quarter, more than half of all S&P stocks are off at least 10%.

The S&P 500 has averaged gains of 3.9% in the fourth quarter and was up four out of every five years since World War II, according to CFRA.

“Q4 2021 will likely record a higher-than-average return. However, investors will need to hang on tight during the typically tumultuous ride in October, which saw 36% higher volatility when compared with the average for the other 11 months,” notes CFRA chief investment strategist Sam Stovall.

One of the first hurdles markets face in the new quarter is Friday’s closely watched employment report, which could spur the Federal Reserve’s decision on when to taper its bond-buying program.

Economists expect about 475,000 jobs were added in September, according to an early consensus figure from FactSet. Just 235,000 payrolls were added in August, about 500,000 less than expected.

—CNBC’s Patti Domm contributed to this report.