Investing.com -- U.S. stock futures edged lower Monday, but September is set to be a positive month as investors look to comments from Fed Chair Jerome Powell for clues over future interest rate cuts.
By 05:45 ET (09:45 GMT), the Dow Futures contract was down 28 points, or 0.1%, S&P 500 Futures traded 5 points, or 0.1%, lower and Nasdaq 100 Futures dropped 25 points, or 0.1%.
The last trading day of the month is likely to start on a slightly downbeat note, but the decision of the US central bank to cut interest rates by an outsized 50 basis points means September is on course to be a positive month, even as it is historically the weakest month for the stock market.
The blue chip Dow Jones Industrial Average has gained 1.8% month-to-date, ending Friday’s session at a new record high, and the broad-based S&P 500 rose 1.6%, while the tech-heavy Nasdaq advanced 2.3% in September.
Powell set to speak
This optimism is largely based on investors expecting the Federal Reserve to roll out another hefty 50-basis point interest rate cut at its next meeting on the back easing price pressures and weakening in labor demand.
With this in mind traders are now turning their attention to comments on the outlook for the economy from Powell at the National Association for Business Economics annual meeting in Tennessee later in the session.
Additionally, the week ends with the release of the October nonfarm payrolls report on Friday, with economists expecting the US economy to have added 144,000 jobs.
Investors are keen to see whether the jobs data will support expectations for a soft-landing scenario, in which the Fed tames inflation without badly impacting growth, or revives fears over the prospect of a recession.
Stellantis cuts annual forecasts
On the corporate front, Carnival (NYSE:CCL) will announce its quarterly results Monday as the third quarter comes to an end.
Elsewhere, Stellantis (NYSE:STLA) stock slumped over 10% premarket after the auto giant, known for brands such as Chrysler, Dodge and Jeep, slashed its annual forecasts and said it would burn through more cash than expected, citing worsening trends in the industry, higher costs to overhaul its U.S. business and Chinese competition on electric vehicles.
Consumer discretionary is on pace as the S&P 500′s best-performing sector in September, having climbed 7.3% higher for the month.
Utilities is the following highest-gaining sector with a rise of around 6%.
Meanwhile, financials, health care and energy are all lower this month.
Crude gains as Israel escalates attacks
Oil prices edged higher Monday on the possibility of a widening Middle East conflict after Israel stepped up its attacks on the Iranian-backed Hezbollah and Houthi militant groups.
By 05:45 ET, the Brent contract climbed 0.2% to $71.69 per barrel, while U.S. crude futures (WTI) traded largely flat to $68.17 per barrel.
Israel said it bombed Houthi targets in Yemen on Sunday, just a few days after killing Hezbollah leader Sayyed Hassan Nasrallah in an escalating conflict in Lebanon.
Both contracts fell last week as demand worries increased after fiscal stimulus from China, the world's second-biggest economy and top oil importer, failed to reassure market confidence.