Following the sharp pullback seen last Friday, stocks may see further downside in early trading on Monday. The major index futures are currently pointing to a sharply lower open for the markets, with the S&P 500 futures down by 1.0 percent.
Concerns about a recent increase by U.S. treasury yields may weigh on Wall Street, as the yield on the benchmark ten-year note closed above 4.6 percent for the first time since late May on Friday.
Treasury yields have surged in recent weeks due in part to the Federal Reserve forecasting fewer than previously estimated interest rate cuts in 2025.
The increase by treasury yields may also reflect worries about the impact President-elect Donald Trump’s policies will have on the U.S. budget deficit.
A slump by shares of Boeing (BA) is also likely to weigh on the Dow after South Korea’s Transport Ministry ordered an inspection of B737-800 aircraft after the deadly Jeju Air crash over the weekend.
Trading activity may be relatively subdued, however, as some traders are likely to remain away from their desks ahead of the New Year’s Day holiday on Wednesday.
Not long after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of December.
The Chicago business barometer is expected to rise to 42.5 in December from 40.2 in November, but a reading below 50 would still indicate contraction.
The National Association of Realtors is also due to release its report on pending home sales in the month of November. Pending home sales are expected to climb by 0.7 percent in November after jumping by 2.0 percent in October.
U.S. stocks tumbled on Friday and the major averages all closed notably lower, with the tech-laden Nasdaq suffering a more pronounced loss as the yield on ten-year note rose to a nearly eight-month high.
The Dow closed down 333.59 points or 0.8 percent at 42,992.21, well off the day’s low of 42,761.56. The S&P 500, which dropped as low as 5,932.95, settled at 5,970.84 with a loss of 66.75 points or 1.1 percent, while the Nasdaq ended lower by 298.33 points or 1.5 percent at 19,722.03, recovering from a low of 19,533.40.
However, the Dow posted a weekly gain of about 1.4 percent, while the S&P 500 and the Nasdaq both moved up by more than 1.5 percent during the week.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday. Japan’s Nikkei 225 Index slumped by 1.0 percent and South Korea’s Kopsi dipped by 0.2 percent, although China’s Shanghai Composite Index bucked the downtrend and inched up by 0.2 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index is down by 0.3 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both down by 0.4 percent.
In commodities trading, crude oil futures are climbing $0.38 to $70.98 a barrel after jumping $0.98 to $70.60 a barrel last Friday. Meanwhile, after slumping $22 to $2,631.90 an ounce in the previous session, gold futures are inching up $4 to $2,635.90 an ounce.
On the currency front, the U.S. dollar is trading at 157.49 yen versus the 157.87 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0432 compared to last Friday’s $1.0426.
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The stock market is showing signs of weakness as futures are pointing to an extended pullback on Wall Street. With concerns over rising inflation, interest rates, and the ongoing conflict in Ukraine, investors are becoming more cautious.
The Dow Jones Industrial Average, S&P 500, and Nasdaq are all expected to open lower today as futures indicate a negative start to the trading session. This comes after a week of volatile trading and mixed earnings reports from major companies.
Investors are keeping a close eye on the Federal Reserve’s upcoming meeting, where policymakers are expected to discuss potential interest rate hikes to combat inflation. The uncertainty surrounding the Fed’s next move is adding to the market’s unease.
With geopolitical tensions escalating and economic indicators pointing to a possible slowdown, many analysts are bracing for a more sustained pullback in the stock market. As always, it’s important for investors to stay informed and be prepared for any market fluctuations.
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