Stocks may move to the downside in early trading on Monday, giving back ground following the rally seen last Friday. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 futures down by 0.2 percent.
Traders may look to cash in on the strong upward move seen in the previous session, which lifted the tech-heavy Nasdaq to a nearly two-month closing high.
The Dow and the S&P 500 also surged to their best closing levels in well over a month, more than offsetting the pullback seen on Thursday.
Negative sentiment may be generated in reaction to news credit rating agency Moody’s has lowered its outlook for the U.S.’ credit rating to negative from stable.
Moody’s reaffirmed the U.S. credit rating at Aaa but said it “expects that the U.S.’ fiscal deficits will remain very large, significantly weakening debt affordability.”
Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of key inflation data in the coming days.
The inflation data could have a significant impact on the outlook for interest rates, with traders recently expressing optimism the Federal Reserve is done raising rates.
Following the sharp pullback seen Thursday afternoon, stocks showed a substantial move back to the upside during trading on Friday. The Nasdaq surged to a nearly two-month closing high, while the Dow and the S&P 500 reached their best closing levels in well over a month.
The major averages saw further upside going into the close, ending the session near their best levels of the day. The Nasdaq soared 276.66 points or 2.1 percent to 13,798.11, the S&P 500 spiked 67.89 points or 1.6 percent to 4,415.24 and the Dow jumped 391.16 points or 1.2 percent to 34,283.10.
For the week, the Nasdaq shot up by 2.4 percent, the S&P 500 advanced by 1.3 percent and the Dow climbed by 0.7 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index inched up by 0.1 percent, while Australia’s S&P/ASX 200 Index fell by 0.4 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has climbed by 0.6 percent, the French CAC 40 Index is up by 0.4 percent and the German DAX Index is up by 0.3 percent.
In commodities trading, crude oil futures are inching up $0.01 to $77.18 a barrel after jumping $1.43 to $77.17 a barrel last Friday. Meanwhile, after plunging $32.10 to $1,942.70 an ounce in the previous session, gold futures are edging up $3.90 to $1,941.60 an ounce.
On the currency front, the U.S. dollar is trading at 151.82 yen versus the 151.52 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.2235 compared to last Friday’s $1.0686.
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