Stock futures open slightly higher

Stock futures opened higher Wednesday night heading into the last session of September and the third quarter, with investors continuing to monitor moves in Treasury yields and discussions in Washington as a potential government shutdown looms.

Contracts on the S&P 500 are set above the flat line. The index was on track to post its first monthly decline since January, with concerns about fiscal and monetary policy, inflation, regulations in China and the ongoing pandemic all colliding to send stocks off their upward trajectory. However, the S&P 500 remained up more than 16% in the year-to-date through Wednesday’s close.

Cyclical stocks led the way higher in September, as investors bet on higher inflation and higher rates. The jump in crude oil prices helped make the energy sector the top performer in the S&P 500. Financial stocks also outperformed, as higher Treasury yields acted as a tailwind to banks’ profitability.

The Nasdaq has underperformed over the past month as traders turned away from the growth and technology stocks that drove the market higher last year. High-tech stocks were also hit as Treasury yields jumped over the past week, with rising borrowing costs serving as a headwind for growing stocks that are highly valued on expectations of strong future earnings.

Even taking into account the decline in US stocks in recent weeks, indices are still far from their record highs. As of Wednesday’s close, the S&P 500 is down about 4% from its all-time closing high from Sept.

We haven’t even had a 5% dip since October last year. will be a year. This sounds a lot worse than it actually is because we haven’t seen a lot of volatility since last October, last September,” Paul Schatz, Head of Heritage Capital, Yahoo Finance Live on Wednesday.

“But remember, all the reasons we went down – nothing new,” he added. “You have a debt ceiling and government shutdowns and Evergrande and inflation. All things known. None of this will hit a bull market or cause a recession. There is always some kind of short-term thing that the market is focused on getting a pullback. We got it. I think it’s one you buy with both hands. In the next week or so, I think we’ll go aggressively to new highs in the fourth quarter.”

However, other critics were less optimistic about the stock given the diversity of concerns.

“We think there are many other headwinds, not directly related to [the Fed’s asset-purchase] Tapering, may weigh on the stock market for some time,” Thomas Matthews, markets economist at Capital Economics, wrote in a note on Wednesday. Among other things, we believe its valuation is already somewhat stretched, that there is limited scope for further upward revisions to earnings estimates given how far they have gone, and that long-term bond yields may rise for reasons other than tapering.”

“As a result, we expect the US stock market to post fairly limited gains over the next two years,” he added.

Thursday night also marks the deadline for Congress to reach a deal to fund the government after the September 30 fiscal year, or risk a shutdown starting Friday. Senate Majority Leader Chuck Schumer Chamber said can vote as early as Wednesday on legislation that would extend funding, then send the bill to the House of Representatives and to President Joe Biden for approval.

6:15 PM ET Wednesday: Stock futures up

Here are the most important movements in the markets until Wednesday evening:

  • S&P 500 futures contractsES = F.): +6.5 points (+0.15%) to 4356.25

  • Dow futures contractsYM = F.): +51 points (+0.15%) to 34316.00

  • Nasdaq futures contractsNQ = F.): +22 points (+0.15%) to 14,761.75

NEW YORK, NY – SEPTEMBER 16: People walk near the New York Stock Exchange (NYSE) on September 16, 2021 in New York City. Despite the rise in retail sales, the Dow Jones Industrial Average declined on Thursday as investors continued to worry about variable delta and news of a slight rise in jobless claims. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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