By Tharuniyaa Lakshmi and Shashwat Chauhan
Oct 5 (Reuters) – Wall Street’s main indexes were set for a subdued open on Monday as technology stocks eased from record highs, while investors looked for fresh clues on the monetary policy path with Treasury yields and oil prices still elevated.
Chip stocks were a drag in premarket trade, with Intel dropping 3.8%, while Micron Technology dipped 0.6%. Nvidia edged up 0.5%, having touched a record high on Friday.
The tech-heavy Nasdaq rose to fresh peaks in the prior session after weaker-than-expected jobs data dampened expectations for a rate hike from the Federal Reserve at its policy meeting this month.
Traders now see an 80% chance of the Federal Reserve holding interest rates steady this month, though a December rate hike remains largely priced in, according to the CME FedWatch tool.
Benchmark 10-year U.S. Treasury yields were last at 5.277%, steady near multi-year highs amid concerns over deteriorating government finances, heavy debt issuance and elevated energy costs.
Brent crude futures were slightly higher but hovered near the psychologically important $100-a-barrel level as concerns over Gulf oil infrastructure disruptions amid the ongoing US-Israel war persisted. [O/R]
“Many investors expect higher yields to derail the equity rally, but I think the market still has enough momentum to push through further increases in interest rates,” said Peter Andersen, founder of Andersen Capital Management.
At 08:13 a.m. ET, Dow E-minis were up 37 points, or 0.07%, S&P 500 E-minis were up 1.5 points, or 0.02%, and Nasdaq 100 E-minis were down 35 points, or 0.11%.
Optimism about robust corporate has helped US stocks outperform global rivals in the last six months, despite the shaky geopolitical landscape and inflation worries.
October would bring the quarterly earnings season back in focus as roughly 70% of the S&P 500’s market capitalization is slated to have reported by month-end.
Goldman Sachs analysts expect most companies will “once again surpass consensus earnings estimates this quarter,” noting 9% year-on-year earnings growth this quarter for the median S&P 500 stock.
Among the biggest movers on Monday, PTC jumped 35.7% after France’s Schneider Electric agreed to buy the software firm in an all-cash deal valuing its equity at about $22.6 billion.
RXO advanced 24% after freight forwarding firm C.H. Robinson Worldwide agreed to buy the transportation broker in a stock-and-cash transaction for $5.8 billion.
Cerebras Systems rose 4.4% after OpenAI CEO Sam Altman said the chip designer is a “close partner” and that the companies have “deep engagement pushing on the frontiers of speed.”
Meanwhile, brokerage Panmure Liberum warned that the equity bull market could be nearing its end, forecasting the S&P 500 will fall more than 35% by end-2027.
The near-term forecast, however, remained upbeat based on year-end targets of Wall Street giants. The median year-end target of at least 20 brokerages stood at over 7,900, according to data compiled by Reuters.
Also on the radar are readings of two surveys of US services sector activity for September, due shortly after markets open.
(Reporting by Tharuniyaa Lakshmi and Shashwat Chauhan in Bengaluru; Editing by Devika Syamnath)
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