U.S. Stocks May Move To The Upside In Early Trading

After posting strong gains last week, stocks may see further upside in early trading on Monday. The major index futures are currently pointing to a modestly higher open for the markets, with the S&P 500 futures up by 0.2 percent.

The markets may continue to benefit from recent upward momentum, which has led to an eight-day winning streak for the Dow.

Renewed optimism about an interest rate cut by Federal Reserve in the coming months has contributed to the recent strength, although key inflation data due this week could have a significant impact on the outlook for rates.

The Labor Department is scheduled to release its reports on producer and consumer price inflation on Tuesday and Wednesday, respectively.

Economists expect producer prices to rise by 0.3 percent in April after edging up by 0.2 percent in March, while the annual rate of growth is expected to tick up to 2.2 percent from 2.1 percent.

Consumer prices are expected to climb by 0.4 percent in April, matching the increase seen in March. Core consumer prices, which exclude food and energy prices, are expected to rise by 0.3 percent in April after climbing by 0.4 percent in March.

The annual rate of consumer price growth is expected to dip to 3.4 percent in April from 3.4 percent in March, while the annual rate of core consumer price growth is expected to slow to 3.6 percent from 3.8 percent.

Remarks by Fed Chair Jerome Powell may also attract attention this week along with reports on retail sales, industrial production and housing starts.

Among individual stocks, shares of GameStop (GME) are soaring in pre-market trading after social media persona “Roaring Kitty,” whose posts helped spark a frenzy of activity in the video game retailer’s stock in 2021, posted on X for the first time in three years.

Website building and hosting company Squarespace (SQSP) is also likely to move to sharply higher after entering into a definitive agreement to go private in an all-cash transaction valued at approximately $6.9 billion.

On the other hand, shares of PENN Entertainment (PENN) may come under pressure after Bank of America downgraded its rating on the sports-betting company’s stock Neutral from Buy.

Stocks moved to the upside early in the session on Friday but showed a lack of direction over the remainder of the trading day. The major averages eventually ended the day mixed, although the Dow closed higher for the eighth consecutive session.

While the tech-heavy Nasdaq edged down 5.40 points or less than a tenth of a percent to 16,340.87, the S&P 500 crept up 8.60 points or 0.2 percent to 5,222.68 and the Dow rose 125.08 points or 0.3 percent to a new one-month closing high of 39,512.84.

For the week, the Nasdaq jumped by 1.1 percent, while the S&P 500 and the Dow surged by 1.9 percent and 2.2 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan’s Nikkei 225 Index edged down by 0.1 percent and China’s Shanghai Composite Index slipped by 0.2 percent, while Hong Kong’s Hang Seng Index advanced by 0.8 percent.

Meanwhile, the major European markets have all moved modestly lower on the day. The U.K.’s FTSE 100 Index, the French CAC 40 Index and the German DAX Index are all down by 0.2 percent.

In commodities trading, crude oil futures are climbing $0.62 to $78.88 a barrel after slumping $1 to $78.26 a barrel last Friday. Meanwhile, after surging $34.70 to $2,375 an ounce in the previous session, gold futures are tumbling $22.70 to $2,352.30 an ounce.

On the currency front, the U.S. dollar is trading at 155.72 yen versus the 155.78 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0796 compared to last Friday’s $1.0771.