S&P500 and Nasdaq 100: Powell, Payrolls, and China’s Market Surge to Influence US Indices

E-mini S&P 500 Futures Slip Ahead of Fed Speech

E-mini S&P 500 Index futures are declining for the second consecutive session as traders await a key speech from Federal Reserve Chair Jerome Powell. Investors are closely watching for signals about whether the Fed will opt for a 25- or 50-basis point rate cut at its next policy meeting in November. Additionally, the upcoming U.S. Non-Farm Payrolls report, set for release this Friday, is contributing to caution as some traders trim long positions ahead of the data.

S&P 500 on Track for First Positive September Since 2019

Despite the recent pullback, the S&P 500 has gained over 1.5% so far in September. If the index holds these gains, it would mark the first positive September since 2019, when it rose by 1.7%. Major stock indexes, including the Dow and Nasdaq, are also on course to finish both the month and the third quarter in positive territory. The S&P 500 and Dow have added 1.6% and 1.8%, respectively, while the Nasdaq has advanced 2.3%.

September, typically a challenging month for stocks, started with weakness but recovered as the Federal Reserve introduced a 50-basis point rate cut, fueling optimism. The Dow has led the way this quarter with an 8% gain, followed by the S&P 500 with over 5% and the Nasdaq with 2%.

Consumer Discretionary Leads Sector Gains

The consumer discretionary sector has been the standout performer in September, rising 7.3%. Leading this charge is Las Vegas Sands, which surged 31.1%, followed by Wynn Resorts and Tesla, which climbed 27% and 22%, respectively. Utilities also posted solid gains of around 6%. However, financials, health care, and energy sectors are lagging, each finishing the month in negative territory.

In premarket trading, Nio shares soared over 13% following news of a significant cash infusion into its Nio China division. Conversely, Stellantis fell by more than 13% after lowering its full-year forecast due to a weakening global market, dragging Ford and GM shares lower as well.

Chinese Stocks Surge Following Strong Economic Data

Chinese stocks saw their biggest one-day rally since 2008, with the mainland CSI 300 index jumping 8.5%. This surge came after better-than-expected manufacturing data for September, sparking optimism about China’s economic recovery. U.S.-traded Chinese ETFs followed suit, with the iShares China Large-Cap ETF (FXI) rising 2.5% and the iShares MSCI China ETF (MCHI) climbing 3.5%.

The Chinese market rally also boosted several U.S.-listed Chinese stocks. Alibaba’s stock rose 4% in premarket trading after China’s central bank announced plans to lower mortgage rates on existing home loans, driving a broader rally across China-focused assets.

Market Forecast

Looking ahead, October is traditionally a volatile month, known for significant market corrections. However, analysts are optimistic heading into the fourth quarter. Canaccord Genuity’s Michael Welch notes that Q4 typically ends positively in more than three out of every four years. With favorable technical conditions and the possibility of further Fed easing, investors are encouraged to position for a potential rally into year-end, especially on market pullbacks.