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U.S. equity futures turned higher Friday, following on from the worst month for tech stocks since the peak of the pandemic, as investors enter the final quarter of the year focused on inflation, energy markets and the Federal Reserve.

Stocks were given a solid boost of early support from Dow component Merck  (MRK) – Get Merck & Co., Inc. (MRK) Report, which surged 7.5% to $80.72 each after the pharma group unveiled promising data for a COIVD antiviral treatment it said can cut the risk of hospitalization and death in at-risk patients by as much as 50%.

Soaring energy prices, exacerbated by a power crisis in China that has spilled over into markets all around the world, supply chain disruptions that are triggering profit warnings across several corporate sectors and wage increases linked to a record labor market shortage have lifted by benchmark Treasury bond yields and boosted inflation forecast, each of which have acted as a breaker on U.S. equity markets.

Investors will get a glimpse of that impact later this morning with the August reading of Fed’s preferred measure of inflation, the PCE Price Index, while laying the groundwork for next week’s jobs report and the start of the third quarter earnings season.

On the fiscal side, House Speaker Nancy Pelosi will once again attempt to bridge the gap between progressive and moderate Democrats Friday as she moves to pass a $1 trillion infrastructure bill that has divided the party for months after failing to reach an agreement last night.

Futures contracts tied to the Dow Jones Industrial Average are indicating a 190 point opening bell gain to kick-off the month of October, after the biggest monthly percentage drop for the 30-stock average since September of last year, paced by a 36 point boost from Merck.

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The broader S&P 500, which notched a modest 0.23% third quarter gain despite the worst month of declines since March of 2020, is priced for a 15 point gain. Nasdaq Composite futures, meanwhile, are set for a more modest 46 point gain as benchmark 10-year note yields fell below 1.49% in overnight trading amid weaker-than-expected factory activity data from Asia.

Five9  (FIVN) – Get Five9 Inc. Report was also active, falling 0.65% after $158.45 each after shareholders rejected a $14.7 billion all-stock takeover bid from Zoom Video Communications.  (ZM) – Get Zoom Video Communications (ZM) Report

In Europe, stocks slumped to a two-month low in early trading, lead by declines for cyclicals and travel companies, but pared those declines even as data showed Eurozone inflation surged 3.4% — the fastest pace since 2008 — over the months of September. 

Oil prices were also on the back foot, although within touching distance of their recent three-year highs, amid demand concerns linked to the ongoing factory and manufacturing slowdown in China.

WTI futures for November delivery traded 32 cents lower on the session at $74.71 per barrel while Brent contracts December, the global pricing benchmark, were 14 cents lower at $78.185 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, eased from 2021 highs to trade at 94.105.