The final day of the third quarter is off to a weak start as cash flows out of equity markets to send already-low Treasury rates even lower. The culprit is weak economic data out of Europe.

"In a nutshell, while consumer spending in France rose a modest 0.2% in August, German retail sales fell a much more than expected 2.9% in the month, and the Euro region's jobless rate remained unchanged at an elevated 10.0%," said BMO Capital Markets. "So in this environment ... expectations for an ECB rate cut next week should remain high." 

The 10-year Treasury yield is nine basis points down at at 1.92%, the 30-year yield is ten basis points lower at at 2.96%, and the two-year yield is a basis point firmer at 0.25%.  

S&P 500 futures have dropped off 13.1 points to 1,143.20, reflecting a 1.13% fall. Dow futures are 119 points down at 10,980, a 1.07% decline. 

Global markets are also seeing a flight from risk: Shares fell 0.25% in China and 2.32% in Hong Kong, Europe's ongoing session sees the FTSE 100 down 1.55% and the CAC-40 down 2.18%.

Light crude oil moved 1.03% lower overnight to $81.28 per barrel, while gold prices rose 0.36% to $1,623.10.

Key Events Today:

8:30 - The Personal Income & Outlays report is anticipated to show some paltry returns in August. Income is to rise only 0.1%, following gains of 0.3% and 0.2% in the prior two months, while consumption is set to rise 0.2%, following a 0.8% jump in July.

"Weak employment conditions continue to weigh on personal income, with the August report indicating no job growth and a reduction in average earnings," said BBVA. "Continued declines in consumer confidence and flat retail sales for the month suggest conservative spending, particularly after July's surprising jump. Although higher food and energy prices may have contributed to growth in nominal terms, we expect real growth to be minimal."

Nomura Global Economics added that average hourly earnings declined 0.1% in August and employment growth was flat, providing the underpinnings for incomes falling 0.1%.

"We expect spending to increase by 0.3% in August, reflecting an increase in prices," they said. "We expect a headline increase in the PCE price index of 0.3%, which will temper spending in real terms, and we expect core prices to increase by 0.2% m-o-m, which translates into a y-o-y increase of 1.7% compared to 1.5% in July."

9:45 - The Chicago Business Barometer, which tracks the manufacturing and service sectors, has been relatively robust recently despite much slowing down. In August the index fell to 56.5 from 58.8 in July, recording the slowest reading since November 2009. Yet that level was higher than any economist had forecast, as comparable indexes from Philadelphia and New York have been much more volatile. The September index is expected to fall further to 55.5, but that's still well into growth mode.

"Regional manufacturing surveys conducted in early September have shown mixed results, continuing the recent trend of geographical diversion among the economic situation of manufacturers," said Nomura Global Economics. "We expect the Chicago PMI to reflect continued stress on current business conditions in September."

Citigroup noted the Chicago index can be more stable based on how its overall figure is constructed.

"Unlike the Philadelphia Fed index, which can be a subjective assessment of the general business climate, the Chicago and the national ISM indexes are weighted averages of their components," they said. "These components attempt to gauge changes in actual activity. We think this is why the Chicago PMI and the ISMs have been much tamer in recent months, relative to the extremely downbeat Philly survey."

9:55 - Consumer Sentiment is expected to inch forward to 56.8 in September, up from 55.7 in August. The August score represented an 8-point drop to the lowest level since November 2008. A preliminary reading this month showed the index rebound slightly to 57.8, which is now seen as a bit too optimistic given recent volatility and sell-off in the equity market. Whatever the exact figure, the survey sits at recessionary levels.

"The damaging effects on confidence from the debt ceiling crisis and the S&P downgrade may be starting to wear off, but financial markets remain in turmoil and the latest stock market plunge following the Fed's policy decision will reinforce consumer fears of recession," said IHS Global Insight. 

11:00 - James Bullard, president of the St. Louis Federal Reserve, speaks at Point Loma Nazarene University in San Diego.