Stock Futures Mixed as Fourth Quarter Begins Following Strong September

Stock futures presented mixed signals on Tuesday as the fourth quarter and October trading kicked off. After a strong September, the S&P 500 futures showed a slight dip of 0.1%, while Nasdaq-100 futures rose by 0.1%. Dow Jones Industrial Average futures declined by 118 points, or 0.3%.

Both the S&P 500 and Dow reached record highs in the previous session following comments from Federal Reserve Chair Jerome Powell, who indicated that the central bank is not locked into any specific path for rate policy. He also mentioned the possibility of two more rate cuts this year, contingent on the economy meeting expectations.

Despite September's reputation as a tough month for stocks, this year defied that trend. The three major indexes posted gains, marking the first positive September for the S&P 500 since 2019. Furthermore, the S&P 500, Dow, and Nasdaq Composite ended the third quarter in positive territory.

The Federal Reserve’s decision to lower interest rates by half a percentage point at its last meeting helped boost stock performance recently. Investors are now focused on the upcoming nonfarm payrolls report for September, due Friday, which is expected to be the next significant driver for market activity.

There are concerns, however, about potential downside risks, with some market experts questioning whether the Fed's aggressive rate cuts might signal greater weakness in employment and the broader economy than expected.

Traders are also keeping an eye on labor disputes, as members of the International Longshoremen’s Association are striking on the East and Gulf Coasts. While the immediate effects may not impact consumers, the economic consequences could amount to hundreds of millions of dollars.

Additionally, the U.S. Bureau of Labor Statistics is set to release the Job Openings and Labor Turnover Survey for August, alongside key manufacturing reports from S&P Global and ISM Manufacturing, which could further influence market direction.