After moving notably lower last week, stocks are likely to move back to the upside in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 182 points.
Bargain hunting may contribute to initial strength on Wall Street after the steep drop seen last Friday dragged the Dow down to its lowest closing level in well over two months.
The Dow closed lower for five straight sessions and tumbled 3.4 percent last week, marking the worst week for the blue chip index since last October.
Last week’s sell-off came amid concerns about the outlook for monetary policy after the Federal Reserve latest projections called for two interest rates hikes in 2023.
St. Louis Fed President Jim Bullard told CNBC’s “Squawk Box” the first rate hike by the Fed could come as soon as next year.
A lack of major U.S. economic data may keep some traders sidelines ahead of the release of reports on new and existing home sales, durable goods orders and personal income and spending in the coming days.
Fed Chair Jerome Powell is also scheduled to testify before the House Select Subcommittee on the Coronavirus Crisis on Tuesday.
Powell is due to discuss the Fed’s response to the pandemic but could also face questions about the outlook for monetary policy.
Following the mixed performance seen on Thursday, stocks moved mostly lower during trading on Friday. With the drop on the day, the Dow ended the session at its lowest closing level in over two months.
The major averages came under pressure going into the close, with the Dow and the S&P 500 hitting new lows for the session. The Dow tumbled 533.37 points or 1.6 percent to 33,290.08, the Nasdaq slid 130.97 points or 0.9 percent to 14,030.38 and the S&P 500 slumped 55.41 points or 1.3 percent to 4,166.45.
For the week, the Dow plunged by 3.4 percent, the S&P 500 tumbled by 1.9 percent and the tech-heavy Nasdaq fell by 0.3 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index plummeted by 3.3 percent, while Hong Kong’s Hang Seng Index slumped by 1.1 percent.
Meanwhile, the major European markets have moved to the upside on the day. While the German DAX Index has climbed by 0.7 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both up by 0.2 percent.
In commodities trading, crude oil futures are rising $0.16 to $71.80 barrel after climbing $0.60 to $71.64 a barrel last Friday. Meanwhile, after falling $5.80 to $1,769 an ounce in the previous session, gold futures are advancing $7.10 to $1,776.10 an ounce.
On the currency front, the U.S. dollar is trading at 110.14 yen versus the 110.21 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1887 compared to last Friday’s $1.1864.
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