Stock Market Update

The stock market is looking to snap a three-day skid with futures on the S&P 500 trading 20 points above fair value.

Equity futures followed a quiet night with a recent rally, which developed after the market received a solid Personal Income/Outlays report for August. The report showed that personal income increased 0.4% month-over-month in August (Briefing.com consensus: 0.3%) following a 0.4% increase in July. Personal spending jumped 0.6% month-over-month (Briefing.com consensus: 0.4%) following a 0.5% increase in July. The PCE Price Index was up 0.3% month-over-month, as expected, and the core PCE Price Index, which excludes food and energy, was up 0.2%, also as expected. On a year-over-year basis, the PCE Price Index was up 2.7%, versus 2.6% in July, and the core PCE Price Index was up 2.9%, unchanged from July.

The key takeaway from the report is the lack of headline surprise for the inflation prints. That helped calm some of the market's angst about tariff pass-through being more demonstrable; therefore, it was better than feared, which qualifies in a relative sense as being good. The solid income and spending results were a bonus, befitting an economy that is still on a growth trajectory.

Unlike stocks, Treasuries have had a muted reaction to the report, hanging onto their slim starting gains with the 10-yr yield sitting just below 4.17%.

One more report awaits after the open with the final September reading of the University of Michigan's Consumer Sentiment Index (Briefing.com consensus 55.4; prior 55.4) set to be released at 10:00 ET.