Market Snapshot: U.S. stock futures rise as market attempts to shake off 2-day thumping ahead of key services-sector report

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U.S. stock futures gained modestly early Thursday, on the heels of the worst two sessions of trading in nearly two months, as investors watched for a report on the service sector that could help provide further clarity on the health of the domestic economy.

Investors also were paying attention to developments in international trade and bracing for a parade of speakers from the Federal Reserve.

How are benchmarks performing?

Futures on the Dow Jones Industrial Average YMZ19, +0.12% were up 37 points, or 0.1%, to 26,020, those for the S&P 500 index ESZ19, +0.14% were gaining 4.4 points, or 0.2%, at 2,885, while Nasdaq-100 futures NQZ19, +0.24% were advancing 19.25 points to reach 7,565.75, a gain of 0.5%.

On Wednesday, the three main benchmarks had their worst single-session decline since Aug. 23, with the Dow DJIA, -1.86% falling 494.42 points, or 1.9%, to 26,078.62, the S&P 500 index SPX, -1.79%  losing 52.64 points or 1.8% to end at 2,887.61. The Nasdaq Composite Index COMP, -1.56% declined 123.44 points, or 1.6%, to finish at 7,785.25.

Read: Dow, S&P 500, Nasdaq notch worst start to a quarter since 2008 financial crisis as recession fears accelerate

What’s driving the stock market?

Wall Street is awaiting data on U.S. nonmanufacturing, or services, activity in September, as well as August factory orders, for clues about growth in the world’s largest economy after recent reports have sparked rising recession fears.

A report on weekly jobless claims is due at 8:30 a.m. Eastern Time, but investors will be focused on IHS Markit reports on nonmanufacturing due at 9:45 a.m. and the more closely followed services report from the Institute of Supply Management at 10 a.m., with economists’s surveyed by Econoday forecasting a reading of 55.5 versus 56.4 in August. A level of at least 50 indicates improving conditions.

A private-sector employment report from Automatic Data Processing on Wednesday showed that a modest 135,000 jobs were created in September, coming after the weakest reading in manufacturing activity from ISM in about a decade on Tuesday.

“Further deterioration would send a more concerning signal to monetary policymakers about the labor market outlook,” said Deutsche Bank strategists of the ISM index.

Data for Europe, meanwhile, also hasn’t painted a rosy picture of the global economy, with the IHS Markit composite purchasing managers index falling to 50.1 in September from 51.9 in August, marking the lowest reading since June 2013. On top of that, The U.K. services purchasing managers index came out at a six-month low of 49.5, the British economy contends with Prime Minister Boris Johnson’s plans to exit from the European Union.

Investors also were digesting news that the U.S. will impose some $7.5 billion in import duties on goods from the EU, including jetliners, Irish and Scotch whiskies, cheeses and hand tools, starting later this month, after the U.S. won World Trade Organization backing on Wednesday.

Read: Stocks just delivered a reminder about October’s reputation for volatility

Meanwhile, Chicago Fed President Charles Evans told Bloomberg TV he was concerned about the inflation outlook. He said he would go into the two-day Federal Open Market Committee meeting ending on Oct. 30 asking whether still more accommodative policy is needed after two straight rate cuts.

A number of other Fed officials are set to speak on Thursday, including Fed Gov. and Vice Chairman for Supervision Randal Quarles, who is set to deliver a speech in Brussels at 8:30 a.m. ET, Cleveland Fed President Loretta Mester, set to speak at after noon, and Fed No. 2 Richard Clarida, who is slated to speak on the outlook for the economy and monetary policy at 6:35 p.m.

How are other markets trading?

U.S. Treasury yields extended their slide on Thursday. The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -1.23%  was 1.575% on Thursday from 1.594% late Wednesday.

Gold for December delivery GCZ19, +0.03%  steadied after jumping on Wednesday, up 10 cents, at $1,508 an ounce.

West Texas Intermediate crude-oil for November delivery CLX19, -0.28%  was down 9 cents, or 0.1%, at $52.54 a barrel on the New York Mercantile Exchange, after falling 1.8% and settling at a 2-month low on Wednesday.

In Asia overnight Wednesday, Chinese equity benchmarks were closed for a holiday. Japan’s Nikkei 225 NIK, -2.01% meanwhile, fell 2%. European stocks traded mixed, with the Stoxx Europe 600 SXXP, -0.18% down 0.1%.

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