Stock futures rise as the first full week of trading approaches in October

U.S. equity futures were higher in overnight trading on Sunday as investors braced for the first full week of trading in October and the fourth quarter.

Dow futures rose about 100 points. S&P 500 futures gained 0.3% and Nasdaq 100 futures gained 0.35%.

Friday marked the first trading day of October and the last quarter of 2021. Major averages rose on that day as a new oral treatment for Covid-19 was announced, which spiked stocks linked to the economic reopening.

The market rebound followed a difficult September plagued by fears of inflation, the weakening of the Federal Reserve and rising interest rates. The 10-year rate broke 1.56% last week, its highest since June.

The S&P 500 ended the month down 4.8%, breaking a seven-month winning streak. The Dow Jones and the Nasdaq Composite fell 4.3% and 5.3%, respectively, suffering their worst months of the year.

The fourth quarter is generally a good time for stocks, but overhangs like central bank tightening, the debt ceiling, Chinese developer Evergrande and Covid-19 could keep investors cautious. As the fourth quarter approaches, more than half of all S&P shares are down 10% or more.

The S&P 500 posted average gains of 3.9% in the fourth quarter and has risen four out of five years since World War II, according to the CFRA.

“The fourth quarter of 2021 is likely to see an above-average return. However, investors will need to hang on during the generally tumultuous October run, which saw volatility 36% higher than the other 11-month average.” , notes Sam Stovall, CFRA chief investment strategist.

One of the first hurdles markets face in the new quarter is Friday’s closely watched jobs report, which could prompt the Federal Reserve to decide when to cut its bond buying program.

Economists expect around 475,000 jobs to have been created in September, according to an early consensus figure from FactSet. Only 235,000 payrolls were added in August, about 500,000 less than expected.

—Patti Domm of CNBC contributed to this report.