U.S. stock futures trended slightly higher early Tuesday as investors balanced a quiet global trading session against the pressure of elevated Treasury yields and the start of the third-quarter earnings season. The market is currently digesting a severe economic crisis in Iran while assessing whether lower Federal Reserve rate-hike expectations can sustain momentum despite high bond yields.
Polymarket (CRYPTO: POL) contracts indicate a slightly bullish sentiment for the October 6 trading session. The "S&P 500 (SPX) Up or Down on October 6?" contract reflects a 57% chance of a higher open. The previous day's contract for October 5 resolved "Up," with a total trading volume of $27,456.
Market commentary from Vested notes that sentiment remains constructive following a soft September jobs report. This data sharply reduced expectations of an October Fed rate hike, with traders now seeing a low likelihood of a monetary policy shift this month. Vested argues that the key issue is whether this reduced expectation of rate hikes can still counteract the weight of rising bond prices. The U.S. 10-year Treasury yield recently hit 5.34%, its highest level in more than two decades.
Global trading cues are thinner than usual because mainland Chinese markets are closed for Golden Week. Vested expects future market direction to hinge on whether recent revenue increases from artificial intelligence and technology firms support their current price levels amid expensive borrowing costs.
On Monday, major U.S. equity trackers closed higher. The SPDR S&P 500 ETF Trust rose 0.67% to $774.83, while the Invesco QQQ Trust ETF rose 0.88% to $756.20. The State Street SPDR Dow Jones Industrial Average ETF Trust ended the session 0.20% higher at $512.11.
Separately, Steve Eisman shared an AI stock strategy focusing on "picks and shovels" plays, highlighting NVDA, MU, and GEV while warning that hyperscaler cash flow is gone.