U.S. stock futures dipped Thursday, as a massive rally to start the month eased, with rates ticking higher once again.
Dow Jones Industrial Average futures declined by 199 points, or 0.7%. S&P 500 futures slid 0.8%, and Nasdaq 100 futures dropped 0.8%.
The benchmark 10-year rate climbed more than 1 basis point to 3.773%. The 2-year yield, which is more sensitive to monetary policy changes, rose 2 basis points to 4.14%.
Wall Street started the week on a high note, with the S&P 500 staging its biggest two-day rally since 2020. Stocks fought to keep the winning streak going Wednesday but ultimately fell short. The Dow closed about 42 points lower, or 0.14%. The S&P 500 and the Nasdaq Composite slid 0.20% and 0.25%, respectively.
“Few are convinced that the recent move is more than a bear market rally, with skepticism over the durability,” said Mark Hackett, chief of investment research at Nationwide. “Confidence remains weak, ranging from CEOs, small businesses, consumers, and investors. Universal pessimism is bullish from a contrarian perspective, though timing of the pendulum swing is difficult to predict.”
Investors continue to monitor economic data to see if inflation is cooling off, or if the Federal Reserve’s rate hikes are pushing the U.S. closer to a recession.
Data from ADP showed that the labor market remained strong among private companies in September, when businesses added 208,000 jobs. That beat the 200,000 job estimate from Dow Jones. On Friday, the September jobs report from the Bureau of Labor Statistics will be released, giving the central bank and investors another piece of data.
Some companies are reporting earnings, as well. On Thursday, Constellation Brands will announce its results before the opening bell, and Levi Strauss will report after the market closes.