Traders operate on the floor of the New York Stock Exchange (NYSE) in New York City on September 30, 2021.
Spencer Platt | Getty Images
US stock futures saw little change in overnight trading on Sunday as investors prepared for the first full week of trading in October and the fourth quarter.
Dow futures were only down 34 points. S&P 500 futures and Nasdaq 100 futures both traded in slightly positive territory.
Friday was the first day of trading in October and the last quarter of 2021. Key averages rose on that day on news of a new oral treatment for Covid-19 that boosted stocks linked to the economic reopening.
The market rally followed a tough September plagued by fears of inflation, a Federal Reserve tightening and rising interest rates. The 10-year rate topped 1.56% last week, its highest level since June.
The S&P 500 ended the month down 4.8%, breaking a seven month winning streak. The Dow and Nasdaq Composite were down 4.3% and 5.3%, respectively, and had their worst months of the year.
The fourth quarter is usually a good period for stocks, but overhangs like central bank tightening, debt ceiling, Chinese developer Evergrande, and Covid-19 could keep investors cautious. At the start of the fourth quarter, more than half of all S&P stocks are down at least 10%.
The S&P 500 averaged 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 above-average returns. However, investors need to hold on during October's normally turbulent ride, which was 36% more volatile than the average for the other 11 months," notes CFRA chief investment strategist Sam Stovall.
One of the first hurdles markets face in the new quarter is Friday's closely watched labor report, which could spur the Federal Reserve's decision to end its bond-buying program.
According to an early consensus figure from FactSet, economists expect around 475,000 new jobs in September. In August only 235,000 employees were added, about 500,000 fewer than expected.
– CNBC's Patti Domm contributed to this report.