U.S. Stocks May Regain Following Last Friday’s Pullback

Stocks are likely to move back to the upside in early trading on Monday, regaining ground following the steep drop seen in the previous session. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.5 percent.

Traders may look to pick up stocks at somewhat reduced levels following the sharp pullback seen last Friday, which came amid concerns about a surge by inflation expectations and new tariff threats from President Donald Trump.

The upward momentum on Wall Street comes even though Trump has threatened to impose a 25 percent on all steel and aluminum imports into the U.S.

The latest tariff threat comes after Trump said last Friday he plans to announce reciprocal tariffs on many countries this week, with the U.S. imposing tariffs on imports equal to the rates imposed on American exports.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of key U.S. economic data in the coming days.

Reports on consumer and producer inflation are likely to be in focus, while reports on retail sales and industrial production may also attract attention.

Traders are also likely to keep a close eye on congressional testimony by Federal Reserve Chair Jerome Powell, looking for clues about the outlook for interest rates.

Stocks moved sharply lower during trading on Friday, giving back ground after trending higher over the previous few sessions. The major averages turned negative within the first hour of trading and saw further downside as the day progressed.

The major averages climbed off their worst levels going into the close but remained firmly negative. The Nasdaq dove 268.59 points or 1.3 percent to 19,523.40, the Dow tumbled 444.23 points or 1.0 percent to 44,303.40 and the S&P 500 slumped 57.58 points or 1.0 percent to 6,025.99.

With the significant pullback on the day, the major averages also closed lower for the week. The S&P 500 dipped by 0.2 percent, while the Dow and the Nasdaq both fell by 0.5 percent.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Hong Kong’s Hang Seng Index jumped by 1.8 percent and China’s Shanghai Composite Index climbed by 0.6 percent, while Australia’s S&P/ASX 200 Index fell by 0.3 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index is up by 0.7 percent, the German DAX Index is up by 0.5 percent and the French CAC 40 Index is up by 0.2 percent.

In commodities trading, crude oil futures are jumping $1.04 to $72.04 a barrel after rising $0.39 to $71 a barrel last Friday. Meanwhile, after climbing $10.90 to $2,887.60 an ounce in the previous session, gold futures are soaring $45 to $2,932.60 an ounce.

On the currency front, the U.S. dollar is trading at 151.87 yen versus the 151.41 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0325 compared to last Friday’s $1.0328.