Stock market today: Dow Jones expected to rise as energy crisis hits Chinese factories

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Chinese manufacturing in September was held back by an energy crisis.

AFP via Getty Images

The stock market was up on Thursday as investors shelved concerns about central bank stimulus measures, while equities in Asia remained under pressure amid an energy crisis in China weighing on industrial production.

Future for the


Dow Jones Industrial Average

indicated an open 250 more points, after rising 90 points on Wednesday to close at 34,390.

Future for the


S&P 500

and


Nasdaq

indicated a similar open, but it will take a strong push on Thursday for the S&P 500 to avoid its worst monthly performance this year, even if it remains in positive territory for the third quarter of 2021.

Stocks have come under pressure this week largely because of fears surrounding the end of central bank stimulus measures, as investors look to the U.S. Federal Reserve to slow down or soon cut back its monthly buying program. ‘active during the Covid-19 pandemic. An energy crunch putting pressure on industrial production in China, as well as concerns about inflation, weighed on markets again.

Investors appeared ready to dismiss those pressures on Thursday.

“Markets are now limping towards the end of the third quarter, even though they have seen signs of stabilization in the past 24 hours after their last massive sell-off, with stocks rebounding a bit and sovereign bond yields taking a break after their recent relentless rise, “said Jim Reid, strategist at Deutsche Bank.

A “taper tantrum” hit markets on Tuesday, pushing bond yields higher and hurting tech stocks in particular. High returns make future profits less valuable, hitting high growth companies like technology groups, which are expected to earn profits many years into the future. The yield on the benchmark 10-year US Treasury bond was approaching 1.54% early Thursday, but stopped the type of rise seen earlier this week.

“Investors continued to balance the risks of surging energy prices, supply chain disruptions and concerns about more persistent inflation,” said Michael Hewson, analyst at brokerage CMC Markets.

“We should get a better sense of sentiment next week, when all the noise this week is behind us, but it’s inevitable that the sudden 10-year rate reversal of 1.3% a week ago, to more than 1.5% this week, suggests that bond markets have undergone a significant change in sentiment.

Overseas, Hong Kong


Hang Seng Index

fell 0.5%. An energy crisis in China has hit industrial production, weighing on morale. The official purchasing managers index for China’s manufacturing sector fell more than expected to 49.6 in September, from 50.1 in August, due to the underperformance of energy-intensive industries. This is the lowest level since February 2020, when the Covid-19 pandemic hit Chinese industry the most.

The pan-European


Stoxx 600

was 0.8% higher.

The dollar remained at its highest level in a year, with the


US dollar index

at 94.3.

US economic data for the day ahead includes initial jobless claims for last week, continuing jobless claims for the week of September 18, and revised real gross domestic product for the second quarter.

Write to editors@barrons.com


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