Bargain Hunting May Contribute To Initial Rebound On Wall Street

The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to regain ground after moving sharply lower over the two previous sessions.

Traders may look to pick up stocks at relatively reduced levels following the recent pullback, which dragged the Dow down to its lowest closing level in a month.

The major averages showed a particularly steep drop last Friday following the release of disappointing consumer sentiment data.

The recent weakness has pulled the S&P 500 down well off the record closing high reached at the end of the trading day last Wednesday.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of earnings news from Nvidia (NVDA).

The AI darling and market leader is scheduled to release its fourth quarter results after the close of trading on Wednesday.

Traders may also be reluctant to make more significant moves ahead of the release of the Federal Reserve’s preferred readings on consumer price inflation on Friday.

Stocks moved sharply lower over the course of the trading day on Friday, extending the pullback seen during Thursday’s session. The major averages all showed significant moves to the downside, with the Dow tumbling to its lowest closing level in a month.

The major averages moved roughly sideways going into the close, lingering near their worst levels of the day. The Dow plunged 748.63 points or 1.7 percent to 43,428.02, the Nasdaq dove 438.36 points or 2.2 percent to 19,524.01 and the S&P 500 slumped 104.39 points or 1.7 percent to 6,013.13.

With the steep drop on the day, the major averages also moved sharply lower for the holiday-shortened week. The Dow and the Nasdaq both plummeted by 2.5 percent, while the S&P 500 tumbled by 1.8 percent.

The sell-off on Wall Street came after the University of Michigan released a report showing consumer sentiment in the U.S. deteriorated by much more than previously estimated in the month of February.

The University of Michigan said its consumer sentiment index for February was downwardly revised to 64.7 from a preliminary reading of 67.8. Economists had expected the index to be unrevised.

With the unexpected downward revision, the consumer sentiment index is well below the January reading of 71.7, tumbling to its lowest level since hitting 61.3 in November 2023.

The substantial deterioration by consumer sentiment came amid a surge by year-ahead inflation expectations, which spiked to 4.3 percent in February from 3.3 percent in January, reaching the highest level since November 2023.

Long-run inflation expectations also rose to 3.5 percent in February from 3.2 percent in January, reflecting the largest month-over-month increase since May 2021.

“For both short- and long-run inflation expectations, this month’s increases were widespread and seen across income and age groups,” said Surveys of Consumers Director Joanne Hsu. “Inflation expectations rose this month for Independents and Democrats alike; they fell slightly for Republicans.”

A steep drop by shares of UnitedHealth (UNH) also weighed on the Dow, with the health insurance giant plummeting by 7.2 percent to its lowest closing level in ten months.

The plunge by UnitedHealth came after a report from the Wall Street Journal said the Justice Department has launched an investigation into the company’s Medicare billing practices in recent months.

Airline stocks moved sharply lower over the course of the session, resulting in a 4.9 percent nosedive by the NYSE Arca Airline Index. The index plunged to its lowest closing level in well over a month.

Substantial weakness was also visible among gold stocks, with the NYSE Arca Gold Bugs Index tumbling by 4.2 percent. The sell-off by gold stocks came as the price of the precious metal pulled back off its record highs.

Semiconductor stocks also saw considerable weakness on the day, dragging the Philadelphia Semiconductor Index down by 3.3 percent.

Networking, brokerage and software stocks also showed significant moves to the downside, while pharmaceutical stocks were among the few groups to buck the downtrend.

Commodity, Currency Markets

Crude oil futures are slipping $0.13 to $70.27 a barrel after tumbling $2.08 to $70.40 a barrel last Friday. Meanwhile, after edging down $2.90 to $2,953.20 an ounce in the previous session, gold futures are rising $11 to $2,964.20 an ounce.

On the currency front, the U.S. dollar is trading at 149.67 yen versus the 150.39 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0472 compared to last Friday’s $1.0458.

Asia

Asian stocks ended mostly lower on Monday as weak U.S. economic data rekindled growth worries and U.S. President Donald Trump reiterated that his administration would impose reciprocal tariffs “soon” on countries like India and China.

Also weighing on markets, researchers in China said they discovered a new coronavirus in bats that enters cells using the same gateway as the virus that causes Covid-19.

China’s Shanghai Composite Index slipped 0.2 percent to 3,373.03 after Trump directed a top government committee to limit Chinese investment in energy, technology, and other vital U.S. industries.

In addition, media reports suggested that the Trump administration has asked Mexico to levy their own duties on Chinese imports as part of their efforts to avoid possible U.S. tariffs.

On Friday, both the U.S. and China expressed “serious concerns” over each other’s policies in their first call since Trump took office.

Hong Kong’s Hang Seng Index slid 0.6 percent to 23,341.61 after a choppy session.

Japanese stock markets were closed in observance of the emperor’s birthday. Seoul stocks ended lower, with the Kospi falling 0.4 percent to 2,645.27.

Healthcare stocks bucked the weak trend after the discovery of a new bat virus. Sugentech, a maker of covid and influenza test kits, soared 10.7 percent, Cellid rallied 4.4 percent and Welcron climbed 3.3 percent.

Australian markets snapped a five-session losing streak, with financials and utilities pacing the gainers.

The benchmark S&P/ASX 200 Index edged up 0.1 percent to 8,308.20, while the broader All Ordinaries Index settled 0.1 percent lower at 8,560.10. Commonwealth Bank rallied 3 percent and NAB advanced 2.3 percent.

Tech stocks tumbled, with WiseTech Global plunging more than 20 percent amid leadership turmoil. Gold miners Evolution Mining, Gold Road Resources and Northern Star Resources all fell around 2 percent, while Newmont and Resolute Mining plummeted 5-6 percent.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index slumped 1.7 percent to 12,531.72, falling for the fifth straight session to its lowest close since early October despite data showing a rebound in retail spending in the final three months of 2024.

Europe

European stocks are turning in a mixed performance on Monday, while the euro strengthened amid optimism over German election results.

The French CAC 40 Index is down by 0.3 percent and the U.K.’s FTSE 100 Index is down by 0.1 percent, while the German DAX edged up by 0.9 percent after the centre-right Christian Democratic Union (CDU) emerged victorious in the 2025 German federal elections.

German defense stocks such as Hensoldt and Rheinmetall have shown a strong move to the upside on the day.

Swiss generic drug manufacturer Sandoz has also risen as it announced the launch of Pyzchiva, or ustekinumab-ttwe, in the U.S.

U.K. pharma group GSK has also moved notably higher after initiating a £2 billion share buyback program.

National Grid shares have also climbed. The company has agreed to sell its National Grid Renewables U.S. onshore renewables business to Brookfield Asset Management.

Meanwhile, BayWa AG has fallen after Swiss energy investor Energy Infrastructure Partners (EIP) said it will raise its stake in the German agricultural group from 49 percent to 65 percent.

Prosus NV has also slumped. The Dutch technology investor said it intends to buy Just Eat Takewaway.com’s entire issued share capital for 4.1 billion euros. Shares of the latter have soared.

B&M European Value Retail has tumbled after announcing CEO Alex Russo will retire on April 30, 2025. The discount retailer also lowered its annual core profit forecast.

U.S. Economic News

The Treasury Department is scheduled to announce the results of this month’s auction of $69 billion worth of two-year notes.