Here are the key news, trends, and analysis investors need to start their trading day:
1. Stock futures are falling as October’s wild swings continue
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City on October 4, 2021.
Spencer Platt | Getty Images
Dow futures fell 350 points, or 1%, on Wednesday as October lived up to its reputation for extreme volatility. S&P 500 and Nasdaq futures fell more than 1.2% and nearly 1.5%, respectively, in pre-trading hours. On Tuesday, the Dow Jones Industrial Average, S&P 500, and Nasdaq all rose about 1% in a rebound from the previous session’s decline. On Friday, Wall Street started the new month with a strong rally after a tough September. Many market strategists have suggested that while October can be difficult, October was historically a predominantly strong period for stocks. The Nasdaq was 6% off its September 7th high. The S&P 500 has traded at 4.2% since its record close on September 2. The Dow was 3.7% off its August 16th.
2. 10 Year Treasury Yield Exceeds 1.55% Before Job Data
Rising bond yields on Wednesday put tech stocks under pressure, with Apple, Microsoft and Amazon all falling more than 1% pre-IPO. The 10-year government bond yield topped 1.55% ahead of the first of three major job reports. Ahead of Wednesday’s opening bell at 8:15 a.m. ET, ADP will release a look at private sector employment for September. Economists expected US companies to create 425,000 new jobs during the month, compared to 347,000 in August. The Department of Labor issues weekly jobless claims on Thursday morning, the day before the big September employment report.
3. Almost 7 years of high oil prices are fueling inflation concerns
Working oil pumps against a sunset sky.
Imaginima | E + | Getty Images
US oil prices fell modestly from their 7-year highs on Wednesday and are well on the way to breaking a four-session winning streak. However, West Texas Intermediate crude rose 1.7% on Tuesday to hit $ 78.93 a barrel after hitting a session high of nearly $ 80. WTI is up nearly 65% in 2021, adding to price pressures in the US at a time when the Federal Reserve is trying to gauge the resilience of higher inflation as policymakers scrutinize the exceptional monetary stimulus measures of the Covid-19 Should reduce era.
4. Biden admits the $ 3.5 trillion draft budget needs to be smaller
U.S. President Joe Biden makes a note on infrastructure investments at the International Union of Operating Engineers Local 324 training facility in Howell, Michigan, October 5, 2021.
Jonathan Ernst | Reuters
President Joe Biden has admitted that the final version of a $ 3.5 trillion package of social and environmental initiatives with the sole support of the Democrats will have to be significantly smaller. In virtual meetings with Democrats in the House of Representatives this week, Biden said he was reluctant to see a price range between $ 1.9 trillion and $ 2.3 trillion, a Democrat familiar with the sessions said Tuesday. Senator Joe Manchin, a high-profile Democratic objector, wants a bill close to $ 1.5 trillion. For the passage, the Democrats need every vote in the 50-50 Senate and all but three in the House of Representatives.
5. Democrats Consider Filibuster Change to Increase Debt Cap
Biden said Democrats are considering changing Senate filibuster rules to quickly exceed a required debt ceiling increase to avoid a devastating loan default. The deadline set by the Treasury is October 18th. The elimination of the filibuster would lower the typical threshold of 60 votes for adoption to 50. If Vice President Kamala Harris breaks every tie, a simple majority would be enough for it to pass. Republicans want the Democrats to use the reconciliation process they want to use on the budget to implement the debt ceiling.
– Associated Press and Reuters contributed to this report. Follow all market activity like a pro on CNBC Pro. Get the latest on the pandemic with coronavirus coverage from CNBC.