Futures Pointing To Extended Rebound On Wall Street

The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to see further upside following the significant rebound seen during last Friday’s session.

Stocks may continue to benefit from bargain hunting, as the major averages regained ground in the previous session but remain well off the record highs set in December.

The markets are also likely to benefit from continued strength among tech stocks after contract electronics giant Foxconn reported record fourth quarter revenue amid strong AI server demand.

Foxconn is an assembly partner with AI darling and market leader Nvidia (NVDA), which is jumping by 2.6 percent pre-market trading.

Positive sentiment may also be generated in reaction to a Washington Post report suggesting President-elect Donald Trump may scale back his tariff plans.

After Trump called for “universal” tariffs of as high as 10 or 20 percent on everything imported into the U.S., the Washington Post said his aides are now exploring plans that would apply tariffs to every country but only cover “critical imports.”

However, traders may be somewhat reluctant to make significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report on Friday.

The markets will also be closed on Thursday in observance of the National Day of Mourning in recognition of the passing of former President Jimmy Carter.

After trending lower for several sessions, stocks showed a strong move back to the upside during trading on Friday. The major averages all moved sharply higher, with the tech-heavy Nasdaq leading the charge.

The major averages pulled back off their best levels in late-day trading but remained firmly positive. The Nasdaq surged 340.88 points or 1.8 percent to 19,621.68, the S&P 500 jumped 73.92 points or 1.3 percent to 5,942.47 and the Dow climbed 339.86 points or 0.8 percent to 42,732.13.

Despite the rebound on the day, the major averages all moved lower for the holiday-interrupted week. The Dow slid by 0.6 percent, while the Nasdaq and the S&P 500 both fell by 0.5 percent.

The strength on Wall Street came as some traders looked to pick up stocks at relatively reduced levels following recent weakness.

The Nasdaq and the S&P 500 had closed lower for five straight sessions, with the Nasdaq ending Thursday’s trading at its lowest closing level in a month.

However, the major averages remain well off the record highs set in December amid uncertainty about the outlook for the markets following recent volatility.

Some traders also remained away from their desks following the New Year’s Day holiday on Wednesday, with below average trading activity potentially exaggerating the upward move.

In U.S. economic news, the Institute for Supply Management released a report showing manufacturing activity contracted at a slower rate in the month of December.

The ISM said its manufacturing PMI inched up to 49.3 in December from 48.4 in November, although a reading below 50 still indicates contraction. Economists had expected the index to come in unchanged.

With the unexpected increase, the manufacturing PMI reached its highest level since hitting 50.3 in March 2024.

“While the index remains in contractionary territory, improved new orders, low customer inventories, and the potential for tariffs to pull forward additional demand should sustain the positive momentum over the near term,” said Matthew Martin, Senior U.S. Economist at Oxford Economics.

Technology stocks helped lead the rebound on Wall Street, as reflected by the particularly strong gain posted by the Nasdaq.

Computer hardware and semiconductor stocks turned in some of the tech sector’s best performances, with the NYSE Arca Computer Hardware Index and the Philadelphia Semiconductor Index surging by 3.1 percent and 2.8 percent, respectively.

Considerable strength was also visible among commercial real estate stocks, resulting in a 1.4 percent gain by the Dow Jones U.S. Real Estate Index.

Oil producer, utilities and housing stocks also saw significant strength, while gold stocks showed a notable move to the downside along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are climbing $0.41 to $74.37 a barrel after jumping $0.83 to $73.96 a barrel last Friday. Meanwhile, after falling $14.30 to $2,654.70 an ounce in the previous session, gold futures are edging down $0.70 to $2,654 an ounce.

On the currency front, the U.S. dollar is trading at 156.37 yen versus the 157.26 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0419 compared to last Friday’s $1.0308.

Asia

Asian stocks ended flat to lower on Monday, though Seoul stocks rallied after a court dismissed an appeal by Yoon Suk Yeol’s lawyers against an arrest warrant for the impeached president. Japanese markets led declines due to profit taking following the Nikkei stock index’s record year-end close.

Chinese and Hong Kong markets ended on a sluggish note as U.S-China trade tensions loomed and investors looked for greater clarity on the implementation of stimulus policies.

Oil prices eased from near three-month highs in Asian trading amid concerns over sanctions and a stronger dollar after positive U.S. House Speaker election results.

Gold ticked lower ahead of the release of minutes from the Fed’s last meeting due Wednesday and the December payrolls report due on Friday.

China’s Shanghai Composite Index slipped 0.1 percent to 3,206.92 and the onshore yuan breached a key milestone for the first time since late 2023 amid reports that the People’s Bank of China will issue the largest-ever offshore yuan bonds in Hong Kong this month.

Hong Kong’s Hang Seng Index dropped 0.4 percent to 19,688.29 after a choppy session as a private sector survey showed Chinese service activity expanded at a faster clip at the end of 2024.

Japan’s Nikkei 225 Index slumped 1.5 percent to 39,307.05 on the first trading day of 2025. Japanese financial markets were closed from last Tuesday for the New Year holidays.

The broader Topix Index settled 1.0 percent lower at 2,756.38, while the yen fell under pressure from higher U.S. Treasury yields.

Earlier in the day, a measure of Japanese service sector activity signaled rising prices and wages, potentially supporting a January BoJ rate hike.

Seoul stocks logged strong gains, with tech stocks climbing after Taiwan-listed Hon Hai Precision Industry Co., the assembly partner to Nvidia Corp. and Apple Inc., posted record revenue for the fourth quarter.

The Kospi jumped 1.9 percent to 2,488.64. Samsung Electronics rallied 2.8 percent, SK Hynix surged 9.8 percent, Naver jumped 4 percent and LG Energy Solution advanced 1.5 percent.

Australian markets fluctuated before ending marginally higher, led by technology stocks. Miners underperformed after iron ore prices fell below US$100 ($160.73) per ton on Friday.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index finished marginally higher at 13,072.93.

Europe

European stocks have started the week on a positive note, with banks and technology stocks leading the surge ahead of key U.S. and European economic data due later in the week.

While the French CAC 40 Index has jumped by 1.5 percent, the German DAX Index is up by 1.0 percent and the U.K.’s FTSE 100 Index is up by 0.2 percent.

The euro has edged higher against the dollar after French Finance Minister Eric Lombard said the 2025 budget will aim narrow the deficit to between 5 percent and 5.5 percent of economic output.

Spectris, a British providing instrumentation and controls, have moved sharply higher after HSBC’s rating upgrade to “buy” from “hold”.

Infrastructure firm Balfour Beatty has edged up slightly after an announcement that it has appointed its corporate brokers to manage an initial tranche of its 2025 share buyback program.

Diversified Energy Company has fallen as it announced the acquisition of several assets in America’s Appalachian Basin, across Virginia, West Virginia and Alabama.

U.S. Economic News

Federal Reserve Board Governor Lisa Cook is due to speak on the “Economic Outlook and Financial Stability” before the Seventh Conference on Law and Macroeconomics hosted by the University of Michigan Law School at 9:15 am ET.

At 10 am ET, the Commerce Department is scheduled to release its report on new orders for manufactured goods in the month of November. Factory orders are expected to dip by 0.3 percent in November after rising by 0.2 percent in October.

The Treasury Department is due to announce the results of this month’s auction of $58 billion worth of three-year notes at 1 pm ET.