Stock futures turn slightly positive after Dow, S&P 500 cap worst month since March 2020

Stock futures rose slightly in overnight trading Sunday after Wall Street wrapped up another negative quarter and both the S&P 500 and Dow Jones Industrial Average finished their worst month since March 2020.

Futures tied to the Dow Jones Industrial Average gained 100 points, or 0.35%, while S&P 500 added 0.22%. Nasdaq 100 futures traded flat.

Friday capped off a negative month and quarter for all the major averages, with the Dow falling 500.10 points, or 1.71%, to close below 29,000 for the first time since November 2020.

For the quarter, the Dow fell 6.66% to notch a three-quarter losing streak for the first time since the third quarter of 2015. Both the S&P and Nasdaq Composite fell 5.28% and 4.11%, respectively, to finish their third consecutive negative quarter for the first time since 2009.

The Dow shed 8.8% in September, while the S&P 500 and Nasdaq Composite lost 9.3% and 10.5%, respectively. All the major averages also recorded their sixth negative week in seven.

Heading into the new quarter, all S&P 500 sectors sit at least 10% off their 52-week highs. Nine sectors finished the quarter in negative territory. Consumer discretionary was the best performer, gaining more than 4.1%.

In the fourth quarter, elevated inflation and a Federal Reserve intent on bringing surging prices to a halt regardless of what it means for the economy will likely continue to weigh on markets, said Truist’s Keith Lerner. Oversold conditions, however, also make the market vulnerable to a sharp short-term bounce on good news, he added.

“I think we could be set up for some type of reprieve but the underlying trend at this point is still a downward trend and choppy waters to continue,” Lerner said.

On the economic front, Markit PMI and ISM manufacturing data are slated for release on Monday along with construction spending.