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Briefing.com Summary:
*Micron had a big beat and encouraging outlook, but its stock is still trading lower in pre-market action.
*Treasury yields rose overnight but eventually reversed course, sending the 10-yr note yield from 5.34% to 5.27% without a clear catalyst
*The September ISM Manufacturing Index will be a closely watched report today.
When August was coming to an end, market narratives were awash in references to September being historically the worst month, on average, for the stock market. Now that September 2026 is over (and, for the record, it was a terrible month for the broader market), market narratives are quick to highlight how October is the month that has featured some of the worst stock market crashes in history.
Well, this is day one of October 2026, and day one looks set to start at least on a positive note.
Currently, the S&P 500 futures are up 18 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 117 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 119 points and are trading 0.2% above fair value.
The upside bias has been helped by Micron's (MU) better-than-expected earnings results and outlook, but the irony is that Micron itself is trading 1.0% lower in pre-market action as it contends with some exceedingly high expectations. It should be noted that demand is not a problem for Micron. Fiscal Q4 revenue was up 379% year-over-year, and the company is expecting the supply-demand environment to be even tighter in CY27 and CY28 compared to CY26.
That is a feather in the cap for the AI trade as we move closer to the start of the third quarter earnings reporting period.
Micron's weakness aside, the market is powering through this morning, driven largely by some buy-the-dip interest in the wake of September's losses. Elevated Treasury yields and higher oil prices, however, remain a sticking point.
Overnight, the 10-yr note yield reached 5.34%—its highest level since 2002--catalyzed by energy-driven inflation worries that flowed from a Reuters report that China's refiners are banning fuel exports for October and Minneapolis Fed President Kashkari's view that there is apt to be one more rate hike this year and another in 2027. Mr. Kashkari is an FOMC voter.
There will be a lot of Fedspeak over the course of today's session, but the recovery of the equity futures market has been helped by the recovery in the Treasury market from its lows overnight. The 10-yr note yield made its way back to 5.27% and currently sits at 5.29%, down one basis point from yesterday's settlement. WTI crude futures are up 1.2% to $91.52/bbl, while Brent crude futures are up 2.1% to $100.13/bbl.
Another impressive initial jobless claims report has stymied some of the recovery effort in the Treasury market. For the week ending September 26, initial jobless claims fell by 1,000 to 197,000 (Briefing.com consensus: 200,000). Continuing jobless claims for the week ending September 19 decreased by 11,000 to 1.701 million.
The key takeaway from the report remains the same: layoff activity continues to run at low levels that reflect a solid demand environment.
Other key data today will include the final September reading for the S&P Global U.S. Manufacturing PMI (prior 57.0) at 9:45 a.m. ET and the September ISM Manufacturing Index (Briefing.com consensus: 55.2%; prior 54.6%) at 10:00 a.m. ET.
Price indexes in those reports, and particularly the ISM report, will be closely watched as a potential driver of Fed policy action. The CME FedWatch Tool currently shows a 38.6% probability of a 25-basis-point rate hike at the October FOMC meeting, down from 68.6% a week ago.
