U.S. Stocks May Lack Direction In Early Trading

After snapping a nine-week winning streak last week, stocks may show a lack of direction in early trading on Monday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures by just 0.1 percent.

Traders may be reluctant to make significant moves ahead of the release of key U.S. inflation data in the coming days.

The Labor Department’s reports on consumer and producer price inflation data could have a significant impact on the look for interest rates.

While the Federal Reserve is widely expected to leave interest rates unchanged when it meets later this month, the data could impact expectations regarding a rate cut in March.

Optimism about a March rate cut have recently waned, although CME Group’s FedWatch Tool currently still indicates a 62.7 percent chance of a decrease.

After trending lower during the past several sessions, stocks saw considerable volatility over the course of the trading day on Friday. The major averages swung back and forth across the unchanged line before eventually closing slightly higher.

The tech-heavy Nasdaq inched up 13.77 points or 0.1 percent to 14,524.07, snapping a five-session losing streak. The Dow also crept up 25.77 points or 0.1 percent to 37,466.11, while the S&P 500 rose 8.56 points or 0.2 percent to 4,697.24 after closing lower for four consecutive sessions.

Despite the uptick on the day, the major averages all moved lower for the first week of the new year. The Nasdaq plunged by 3.3 percent, the S&P 500 slumped by 1.5 percent and the Dow slid by 0.6 percent. With the drop, the major averages moved to the downside for the first time in ten weeks.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday, with the Japanese markets closed for a holiday. China’s Shanghai Composite Index slumped by 1.4 percent, while Hong Kong’s Hang Seng Index plunged by 1.9 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is down by 0.1 percent, the French CAC 40 Index is up by 0.1 percent and the German DAX Index is up by 0.2 percent.

In commodities trading, crude oil futures are plunging $2.63 to $71.18 a barrel after jumping $1.62 to $73.81 a barrel last Friday. Meanwhile, after edging down $0.20 to $2,049.80 an ounce in the previous session, gold futures are sliding $19.80 to $2,030 an ounce.

On the currency front, the U.S. dollar is trading at 144.33 yen versus the 144.63 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.2713 compared to last Friday’s $1.0943.

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