Thursday 10/1/2026 a.m.

• Markets start the month lower as yields and oil rise – U.S. equity markets are lower in early trading on Thursday, as bond yields and oil prices are extending their recent advances. The 10-year Treasury yield is near 5.33%. Internationally, Asia finished mixed overnight, while European equities are trading lower as eurozone unemployment held steady in September at 6.4%, as expected. In energy markets, WTI crude is advancing to about $91 per barrel after China suspended fuel exports for October. The U.S. dollar is strengthening against most major currencies, consistent with the rise in Treasury yields.
   
• Manufacturing indexes remain solidly in expansion in September: The final S&P U.S. Manufacturing Purchasing Managers Index (PMI) for September was revised modestly down to 55.9, compared with forecasts for 57.0. Despite the downward revision, the reading was the highest in more than four years and remained above the key 50.0 threshold reflecting expansion for the 14th consecutive month. All five major components contributed positively, led by output and new orders. Employment also increased as firms expanded capacity to meet demand. At the same time, input prices rose at a faster pace due to tariffs, energy prices and material shortages, suggesting that some cost pressures persist in the manufacturing sector. The Institute for Supply Management (ISM) Manufacturing PMI for September edged lower to 54.5, modestly below expectations for 55.0. Within ISM's components, declines in production, inventories and supplier deliveries weighed on the headline index, partly offset by improvement in new orders and employment. Overall, the reports point to continued manufacturing expansion and healthy underlying demand, which should help provide broader support for the economy and labor market.
   
• Jobless claims edge lower – Initial jobless claims declined to 197,000 this past week, compared with expectations of 200,000. Continuing claims, which measure the total number of people receiving unemployment benefits, also fell to 1.70 million, below forecasts for 1.72 million and the lowest reading in three years. Together, the figures suggest that layoffs remain limited and labor-market conditions are relatively healthy. Continued employment resilience should help support household income and consumer spending, helping sustain economic growth. A solid labor market also gives the Fed greater flexibility to remain focused on inflation, in our view, particularly as higher energy prices and manufacturing input costs point to continued price pressures.

Brian Therien, CFA;
Investment Strategy

^{Source for all data: FactSet.}