Stock Market Update

U.S. equity futures point to a modestly lower start as elevated Treasury yields and geopolitical uncertainty continue to weigh on sentiment.

Asian markets finished higher on Monday, with weaker-than-expected US employment data easing Fed rate-hike concerns and fueling renewed buying in technology shares despite continued pressure from elevated yields and oil prices. Japan's Nikkei 225 surged 2.4% to a three-month high, led by Tokyo Electron (+5.5%), Advantest (+4.3%), SoftBank Group (+3.0%), Mitsubishi UFJ (+2.0%), and Sumitomo Mitsui (+1.6%). SoftBank CEO Masayoshi Son also highlighted growing AI safety risks while calling for international cooperation as the technology advances. Hong Kong's Hang Seng Index gained 0.3%, rebounding from Friday's 2.6% decline, with Kingboard Laminates (+11.9%), Z.AI (+6.2%), and Lenovo (+4.7%) leading technology strength, while Budweiser Brewing (-2.1%) retreated after flagging a $52 mln withholding-tax charge. China's Shanghai Composite remained closed for the National Day holiday, while South Korea's market was also closed for National Foundation Day.

• In economic data:
  • Japan's September Household Confidence was 35.4 (expected 35.3; prior 35.5).
  • Japan's September S&P Global Services PMI was 51.3 (expected 51.6; prior 52.5), while the Composite PMI was 52.3 (expected 52.5; prior 53.5).
  • Australia's September S&P Global Services PMI was 51.9 (expected 51.4; prior 53.2), while the Composite PMI was 51.3 (expected 50.8; prior 52.7).
  • Australia's September MI Inflation Gauge increased 0.3% m/m (prior 0.5%).

European markets trade mixed, with elevated bond yields and growing political uncertainty weighing on sentiment while lower oil prices provide some relief. Germany's DAX trades near the flat line after giving up an early advance, with Siemens Healthineers, Infineon Technologies, Qiagen, and Hochtief each down more than 1%, while Continental (+1.8%) outperforms following an upgrade to Overweight at Morgan Stanley. France's CAC 40 falls 0.8% to its lowest level since March as fiscal and political concerns intensify, with Schneider Electric (-7.1%), Société Générale (-2.5%), Hermès (-2.5%), BNP Paribas (-1.6%), and Crédit Agricole (-1.4%) among the laggards. London's FTSE 100 gains 0.3%, supported by energy, telecom, and mining shares, with Ithaca Energy (+2.8%) advancing after agreeing to acquire a portfolio of Canadian offshore oil assets from Suncor for up to $1.1 bln. Eurozone business activity expands at a faster pace in September, with the Composite PMI rising to 53.1 from 52.0, although producer prices accelerate 8.2% yr/yr in August. Political risk also extends to Spain, where Prime Minister Pedro Sánchez has called snap elections for November 29 after Congress rejected two housing decrees.

• In economic data:
  • The eurozone's September HCOB Services PMI was 53.0 (expected 53.0; prior 51.6), while the Composite PMI was 53.1 (expected 53.1; prior 52.0).
  • The eurozone's August PPI increased 1.9% m/m (expected 1.9%; prior 1.6%) and 8.2% yr/yr (expected 8.1%; prior 5.8%).
  • The eurozone's October Sentix Investor Confidence was 2.7 (expected 4.5; prior 5.1).
  • Germany's September HCOB Services PMI was 52.9 (expected 52.9; prior 49.7), while the Composite PMI was 53.8 (expected 53.8; prior 51.8).
  • France's September HCOB Services PMI was 51.2 (expected 51.4; prior 48.0), while the Composite PMI was 51.1 (expected 51.2; prior 48.5).
  • Italy's September HCOB Services PMI was 51.7 (expected 54.6; prior 55.2), while the Composite PMI was 51.0 (prior 53.6).
  • Spain's September HCOB Services PMI was 58.3 (expected 57.1; prior 57.8).
  • The U.K.'s September S&P Global Services PMI was 52.1 (expected 51.7; prior 52.5), while the Composite PMI was 52.0 (expected 51.7; prior 52.5).