Australia

Australian shares are set to fall at the open, after further declines on Wall St and imminent ground invasion of Gaza by Israel.

ASX futures were down 1.0% or 67 points as of 7:30am on Monday, suggesting a lower open.

The autumn pullback in the US stock market worsened Friday, pushing the S&P 500 into a correction and to its worst two-week decline of the year.

The broad stock-market gauge wavered for much of the day before turning lower and losing 0.5% for the session, bringing it down more than 10% from its recent high. A drop in shares of Chevron and JPMorgan Chase helped send the Dow Jones Industrial Average down 367 points, or 1.1%, to its lowest closing level since March.

The Nasdaq Composite eked out a 0.4% gain, though the tech-heavy index finished well off its session highs. The index entered a correction earlier in the week and has fallen for three consecutive weeks.

The mood in the market has darkened in October as investors have parsed a wave of earnings results from some of the biggest companies in America while navigating a punishing bond rout. The yield on the 10-year Treasury note breached 5% for the first time in 16 years in early trading Monday, keeping many investors glued to the bond market throughout the week. It settled at 4.846% on Friday.

In commodity markets, Brent crude oil rose 2.9% to US$90.48 a barrel while gold rose 1.1% to US$2,006.37.

In local bond markets, the yield on Australian 2 Year government bonds was lower at 4.37% while the 10 Year yield was also down at 4.81%. US Treasury notes were down, with the 2 Year yield at 5.00% and the 10 Year yield easing to 4.83%.

The Australian dollar was unchanged 1t 63.31 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was flat at 100.72.

Asia

Chinese shares ended higher, led by pharmaceutical and consumer-services stocks. Sentiment was likely buoyed after data showed that the country's industrial profits grew for a second straight month in September, showing signs of a stabilizing economy amid more policy support. The Shanghai Composite Index regained the key 3000 level, rising 1.0% to close at 3017.78. The Shenzhen Composite Index gained 1.8% and the tech-heavy ChiNext Price Index was 2.9% higher. Among pharma names, Jiangsu Hengrui Medicine rose 2.1% and WuXi AppTec jumped 5.2%. China Tourism Group Duty Free added 4.8% and Shanghai Jinjiang International Hotels advanced 4.5%. Insurance stocks weighed on the market, with China Life Insurance down 1.3% and Ping An Insurance 1.1% lower.

Hong Kong shares ended higher, led by property and tech stocks. Most sectors gained, with the benchmark Hang Seng Index rising 2.1% to 17398.73 and the Hang Seng Tech Index adding 2.5%. Market conditions seem ripe for a rally, Saxo Markets strategist Redmond Wong said. Investors' focus is on a key upcoming policy conference in China, which is expected to address issues like developer and local government debts, he added. Among the top gainers were developers China Evergrande and Shimao Group, which rose 6.3% and 5.45%, respectively. Tech names gained too, with Meituan adding 2.9% and Alibaba up 3.3%. Tencent-backed J&T Global Express closed flat in its trading debut, paring earlier declines. Insurance stocks weighed, as China Pacific Insurance lost 1.15% and China Life Insurance slipped 0.7% to an 11-month low after weak 3Q earnings.

Japan's Nikkei Stock Average rose 1.3% to close at 30991.69 as gains in U.S. stock-index futures likely led to improved risk appetite. Market focus is likely on U.S. economic data such as personal income and spending which are due out later today. Among the best performers on the benchmark index, Fujitsu climbed 12.0%, Nomura Research Institute rose 5.5%, and SG Holdings was up 4.5%. Meanwhile, Takeda Pharmaceutical fell 6.4% after it booked a 2Q net loss and cut its fiscal-year net-profit guidance.

India's benchmark Sensex rose 1.0% to close at 63782.80, tracking gains across most regional equity markets, which likely helped buoy risk appetite. Also, easing concerns over a further escalation of the Israel-Hamas conflict may have supported local stocks. Among the best performers on the benchmark index, Axis Bank rose 3.1%, HCL Technologies added 3.0%, and State Bank of India was up 2.5%.

Europe

European stocks traded mixed ahead of an expected slightly lower open on Wall Street, though Asia closed in positive territory. The Stoxx Europe 600 fell 0.2% and the CAC 40 dropped 0.8%, though the DAX advanced 0.3%. Australian and South Korean stocks rose 0.2%, mainland China and Japanese markets increased more than 1% and Hong Kong's Hang Seng rallied 2%. The The Dow looks set to open at 32770, versus Thursday's close of 32784, ahead of the Fed's preferred PCE inflation data out later today, according to IG. Brent crude gained 1.8% to $88.58 a barrel, boosting oil shares.

The FTSE 100 closed down 0.9% Friday as mainly disappointing earnings and heightened tensions in the Middle East led to another weekly loss for global stock indices, IG analyst Axel Rudolph says in a note. "Heightened tensions in the Middle East and a plethora of central bank decisions by the likes of the BoJ, Fed and BoE will dominate the calendar next week ahead of Friday's all-important U.S. Non-Farm Payrolls," Rudolph says. NatWest—down 12%—was the session's biggest faller after reporting that 3Q pretax profit and net income missed consensus, followed by Lloyds Banking, down 3.4%, and Weir Group, down 3.1%. Rentokil Initial was the day's biggest riser, up 3.6%.

North America

The autumn pullback in the US stock market worsened Friday, pushing the S&P 500 into a correction and to its worst two-week decline of the year.

The broad stock-market gauge wavered for much of the day before turning lower and losing 0.5% for the session, bringing it down more than 10% from its recent high. A drop in shares of Chevron and JPMorgan Chase helped send the Dow Jones Industrial Average down 367 points, or 1.1%, to its lowest closing level since March.

The Nasdaq Composite eked out a 0.4% gain, though the tech-heavy index finished well off its session highs. The index entered a correction earlier in the week and has fallen for three consecutive weeks.

The mood in the market has darkened in October as investors have parsed a wave of earnings results from some of the biggest companies in America while navigating a punishing bond rout. The yield on the 10-year Treasury note breached 5% for the first time in 16 years in early trading Monday, keeping many investors glued to the bond market throughout the week. It settled at 4.846% on Friday.

"Bonds and yields are in the driver's seat right now for markets," said Adam Turnquist, chief technical strategist at LPL Financial. "Yields simply moved too high, too fast."

The sharp ascent in bond yields has triggered volatility across markets. The S&P 500 and Dow Jones Industrial Average are on track to finish October with three consecutive months of losses, the worst such stretch since the three months ending March 2020.

The week was marked with even bigger swings under the surface for everything from technology heavyweights to oil giants. Shares of companies that investors cheered for much of the year -- and that had sent major indexes soaring -- were particularly hard-hit.

Alphabet's earnings disappointed investors, sending the stock down almost 10% for the week, the worst showing since November. Shares of Meta Platforms lost around 3.9%. Chevron shares lost 13%, the worst weekly decline in more than a year, after the company reported quarterly earnings that were sharply lower than a year earlier.

Analysts expect S&P 500 earnings to grow 2.7% for the quarter, the first period of growth since the third quarter of 2022, according to FactSet. Still, that isn't doing much to buoy the stock market.

Several investors said their focus remained on the bond market after Treasury prices plunged at an unusually fast pace in recent weeks. Now, many are bracing for more volatility ahead of a packed week for economic data and the Federal Reserve's next meeting.

"Short-term, I think there's some downside risk," said Hal Reynolds, co-chief investment officer at Los Angeles Capital Management.

Rising bond yields have been particularly painful for some of the smallest stocks in the market. The Russell 2000 index of small companies slumped 2.6% for the week and closed at its lowest level since at least November 2020.

The S&P 500's gains for the year have been cut to 7.2%, sharply down from the nearly 20% advance the index was sitting on in July.

In addition to earnings, investors have been sifting through a barrage of economic data, much of which has highlighted the strength of the U.S. economy. Gross domestic product expanded at a 4.9% seasonally -- and inflation-adjusted annual rate in the third quarter -- more than double the second quarter pace.

The personal-consumption expenditures price index, the Fed's preferred inflation gauge, rose 0.4% in September from the prior month, the same pace as in August.

Next week, investors will be closely parsing the latest jobs report. Some investors said that more positive news on the economy might be bad news for investors concerned about interest rates, and how long they will stay elevated. Many investors expect the Fed to hold rates steady at its meeting next week, though the central bank's path beyond that remains murky.

"We're probably going to continue to see a trend where good news is bad news," said Tim Murray, capital markets strategist at T. Rowe Price.