Which three catalysts, led by a 5.25% Treasury yield, will decide Monday's open after futures slipped?

Key Highlights

• Dow futures were down about 0.15%, S&P 500 futures 0.17%, Nasdaq-100 futures 0.24% and Russell 2000 futures 0.11% early Monday, October 5, a mild pullback after Friday's gains.
• The 10-year Treasury Yield was near 5.25% and CME FedWatch put the odds of an October Fed hike at about 20%.
• Qualcomm (NASDAQ:QCOM) rose roughly 2% to 4% premarket, with reports citing a Huawei Patent licensing deal covering 5G and AI.
• Cerebras reportedly gained about 7% after Sam Altman called it a close partner, and ISM services is due at 10:00 a.m. ET.

Futures and yields

After Friday's rally, in which the S&P 500 rose 0.73% to 7,722.72, futures drifted lower as geopolitical risk returned. Iran said the Strait of Hormuz will not fully reopen until Washington meets seven conditions, and Brent Crude held above USD 100 a barrel. The 10-year yield stood near 5.25% and the 2-year near 4.79%. Traders using the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) and the Invesco QQQ Trust (NASDAQ:QQQ) will watch whether yields rise further. We omit one reported Nasdaq futures level because it appeared inconsistent with the index. The Federal Reserve is now balancing a weak labor market against persistent price pressure.

Premarket movers

Qualcomm (NASDAQ:QCOM) gained roughly 2% to 4% depending on the timing of the quote. Reports cited a multi-year patent licensing arrangement with Huawei covering 5G and AI, and others noted a share offering filing, so the driver is unsettled. Cerebras was reportedly up about 7% after Sam Altman called the company a close partner; we leave it untagged because we did not verify its listing. Vistra (NYSE:VST) was up about 6% on reports of a USD 4 billion federal Loan package for nuclear plant upgrades. Qualcomm (NASDAQ:QCOM) remains the most closely watched mover.

Data and calendar

The ISM services index is due at 10:00 a.m. ET. Consensus was reported near 55.7 against a prior 55.4, though August data showed a prices paid reading of 72.6, the highest since August 2022, and employment in contraction at 47.8. The September FOMC minutes arrive Wednesday, October 7 at 2:00 p.m. ET. The Fed raised rates 25 basis points in September to 3.75% to 4.00%. Strong services prices could revive hike fears, whereas a softer print would support the SPDR S&P 500 ETF Trust (NYSEARCA:SPY). Thursday brings PepsiCo Earnings and Friday Delta Air Lines, so the week offers further tests of consumer demand.

Where Things Stand

Yields, the ISM services data and a few premarket movers are the three catalysts most likely to set Monday's tone, though none is decisive alone. Futures are only slightly lower, so the open may hinge on the 10-year yield near 5.25%. Qualcomm (NASDAQ:QCOM) is the key large-cap mover. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) and the Invesco QQQ Trust (NASDAQ:QQQ) will reflect how the day develops.