U.S. Stocks May Regain Ground After Last Friday’s Sell-Off
Following the sell-off seen last Friday, stocks are likely to regain ground in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.7 percent.
Traders may look to pick up stocks at somewhat reduced levels following the previous session’s nosedive, which came after Israel launched a series of airstrikes against Iran.
While the clash between Israel and Iran continued over the weekend, traders appear optimistic the conflict will remain relatively contained.
“Despite a weekend of violence between the two countries, investors showed no signs of panicking, judging by movements in financial markets on Monday,” said Russ Mould, investment director at AJ Bell.
However, he added, “The Middle East conflict remains a fluid situation and there is the potential for markets to still experience sudden jolts if the tension escalates further.”
The upward momentum on Wall Street also comes as traders look ahead to a meeting of major world leaders at the G7 summit in the Canadian Rockies later this week.
Traders will be looking to the meeting for signs of progress on trade deals ahead of the end of President Donald Trump’s 90-day pause on “reciprocal tariffs” early next month.
The Federal Reserve’s latest monetary policy announcement is also likely to attract attention from traders in the coming days.
While the central bank is widely expected to leave interest rates unchanged, the accompanying statement and Fed officials’ latest projections may provide more clarity about the outlook for rates.
After moving modestly higher over the course of the Thursday’s session, stocks pulled back sharply during trading on Friday. The major averages all moved significantly lower, with the Dow and the S&P 500 pulling back well off Thursday’s three-month closing highs.
The major averages staged a recovery attempt in late morning trading after an early slump but moved back to the downside as the day progressed.
The Dow plummeted 769.83 points or 1.8 percent to 42,197.79, the Nasdaq plunged 255.66 points or 1.3 percent to 19,406.83 and the S&P 500 tumbled 68.29 points or 1.1 percent to 5,976.97.
With the steep drop on the day, the major averages also moved lower for the week. The Dow slumped by 1.3 percent, the Nasdaq slid by 0.6 percent and the S&P 500 fell by 0.4 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index jumped by 1.3 percent, while Hong Kong’s Hang Seng Index climbed by 0.7 percent.
The major European markets have also moved to the upside on the day. While the French CAC 40 Index is up by 1.1 percent, the German DAX Index is up by 0.6 percent and the U.K.’s FTSE 100 Index is up by 0.5 percent.
In commodities trading, crude oil futures are slumping $1.69 to $71.29 a barrel after spiking $4.94 to $72.98 a barrel last Friday. Meanwhile, after surging $50.40 to $3,452.80 an ounce in the previous session, gold futures are falling $20.90 to $3,431.90 an ounce.
On the currency front, the U.S. dollar is trading at 144.23 yen versus the 144.17 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1573 compared to last Friday’s $1.1549.
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