U.S. stock index futures saw little change, following a monthly decline in U.S. stocks in September. The benchmark S&P 500 index fell 0.25% on September 30, the last trading day of the month, resulting in a 0.45% decline for the index for the month. The blue-chip Dow Jones Industrial Average closed down 4% for the month, while the Nasdaq Composite Index, which is dominated by technology stocks, rose slightly by 1%.

On the last trading day of September, U.S. economic data indicated that inflation had slowed down in August, and the market gains seen in the early session were later reversed. Despite the positive inflation data, U.S. Treasury yields continued to rise and are currently at their highest levels in decades, putting pressure on the stock market. The yield on the benchmark 10-year U.S. Treasury note increased by 4 basis points on September 30 to 5.298%, the highest level since 2007.

The yield on 30-year U.S. Treasury bonds also rose by 4 basis points to 5.632%, the highest level since 2002. Futures markets indicate that the S&P 500 index is expected to rise slightly by 0.25%; the Dow Jones Industrial Average is expected to rise by 0.17%, and the Nasdaq Composite Index by 0.29%.

U.S. Inflation and Stock Market Performance

U.S. Personal Consumption Expenditures ( PCE ) Price Index – which is the inflation indicator favored by the Federal Reserve – rose 3.4% year-on-year in August, lower than 3.7% in July of this year. Economists had previously predicted that inflation in August would remain unchanged at 3.7%. The core PCE index, excluding food and energy, rose 3% year-on-year, lower than 3.3% in July.

However, despite inflation data being better than expected, it was still not enough to boost the U.S. stock market. In fact, there was a widespread pullback in the market in September. Although some technology stocks related to artificial intelligence ( AI ) trading did rise that month, approximately three-quarters (75%) of the components of the S&P 500 index fell during that period.

Analysts said that the gains of a few tech stocks, such as Apple ( AAPL ), NVIDIA ( NVDA ), and Microsoft ( MSFT ), overshadowed the broader and deeper decline of the U.S. market in September.