US open: Stocks open flat as bond yields continue to rise
US stocks were swinging between gains and losses early on with little newsflow to drive the direction either way, with the S&P 500 taking a breather after hitting a three-month low last week.
By 1000 in New York, the Dow Jones Industrial Average was down 0.1% at 33,923, the S&P 500 was flat at 4,321, while the Nasdaq rose 0.1% to 13,226.
The S&P 500 fell 2.9% last week to 4,320 – its lowest finish since 9 June – after dovish comments from Federal Reserve policymakers soured the mood.
Bond yields have risen strongly over recent sessions, and that momentum has continued into the new week, with the 10-year Treasury yield up 7.5 basis points at 4.515% on Monday as it continues to hit levels not seen since 2006.
"The higher-for-longer message is being hammered home and markets are listening. Whether they do maintain such a hawkish stance next year is one for the mystics, but the central banks are clear for now," said analyst Neil Wilson from Markets.com.
It's set to be a relatively quiet start to the week in terms of US economic data, with only one major release out on Monday's session – the Chicago Fed National Activity Index for August. The monthly gauge, designed to measure economic activity and related inflationary pressures across the US economy, dropped to -0.16 last month, from a downwardly revised +0.07 in July.
Looking ahead, the focus for markets during the remainder of the week will mostly be on personal consumption expenditures and income data due out on Friday.
However, a host of Federal Reserve members are scheduled to make speeches over the coming days, including chair Jerome Powell and New York Fed president John Williams on Thursday and Friday, respectively.
Comments will be closely watched following the Federal Open Market Committee meeting last week, after which the central bank held rates steady but indicated that another hike is probable before the end of the year.
"The market may react to other data prints throughout the week, but it is more likely to respond to Fedspeak as well as any updates on whether the government will see a shutdown," said analysts at TD Securities.
SAG strike could soon end
Streaming companies and entertainment stocks will be in focus on Monday on the back of news that Hollywood writers have reached an agreement with the major studios, which could – if ratified by members – end strikes that started back in May. It is hoped that the deal could push the Screen Actors Guild (which has also been on strike since July) nearer to an agreement too.
Netflix, Amazon and Apple all rose in early deals, while Disney and Paramount edged lower.
Amazon was also making headlines on the news that it is investing up to $4bn in Anthropic, the AI startup founded in 2021 that produced the Claude AI assistant.
Tyson Foods was under pressure after it emerged that supply chain contractors of the company (and Perdue Farms) were using migrant children as young as 13 in its meat-processing plants.