Futures Pointing To Continued Weakness On Wall Street

The major U.S. index futures are currently pointing to a lower open on Monday, with stocks likely to add to the steep losses posted during last Friday’s session.

Continued weakness in the tech sector may weigh on Wall Street amid a slump by shares of Nvidia (NVDA), which are tumbling by 3.0 percent in pre-market trading.

Ongoing concerns about the outlook for interest rates are also likely to generate selling pressure following last Friday’s stronger-than-expected monthly jobs report.

Interest rate worries have recently contributed to a surge by bond yields, with the yield on the benchmark ten-year note reaching its highest levels in over a year.

In the coming days, reports on consumer and producer price inflation may provide further insight into the outlook for rates.

Reports on weekly jobless claims, retail sales and industrial production are also likely to attract attention later in the week.

Earnings season also starts to pick up steam this week, as financial giants Citigroup (C), Goldman Sachs (GS), JPMorgan (JPM) and Wells Fargo (WFC) are due to report their quarterly results.

U.S. stocks tumbled on Friday due to heavy selling across the board as buoyant non-farm payroll data raised concerns that the Federal Reserve will likely hold interest rates at current levels or slow down the pace of reductions. Rising bond yields hurt as well.

The major averages all closed sharply lower. The Dow settled with a loss of 696.75 points or 1.6 percent, at 41,938.45. The S&P 500 closed down 91.21 points or 1.5 percent, at 5,827.04, while the Nasdaq ended lower by 317.25 points or 1.6 percent, at 19,161.62.

Data from the Labor Department showed U.S. non-farm payroll employment surged by 256,000 jobs in December after jumping by a downwardly revised 212,000 jobs in November.

Economists had expected employment to climb by 160,000 jobs compared to the addition of 227,000 jobs originally reported for the previous month.

The unemployment rate in the U.S. edged down to 4.1 percent in December from 4.2 percent in November. The rate was expected to come in unchanged.

“The Fed already took the foot of the brake somewhat in late 2024, as the unemployment rate edged higher and private hiring cooled,” said Bill Adams, Chief Economist for Comerica Bank. “But they will see December’s solid jobs report as evidence that there is no urgency to take their foot off the brake entirely.”

He added, “Also, the Fed is concerned that another round of fiscal stimulus, higher tariffs, and immigration restrictions could further juice economic growth, raise inflation, and tighten the labor market, more support for a wait-and-see approach for additional cuts.”

Preliminary data from the University of Michigan said consumer sentiment in the U.S. has unexpectedly seen a modest deterioration in the month of January, The report said the consumer sentiment index edged down to 73.2 in January from 74.0 in December. Economists had expected the index to inch up to 74.5.

Oracle, PayPal, eBay, Advanced Micro Devices, Intel, Morgan Stanley, Goldman Sachs, MetLife and American Express closed down by 3 to 6 percent.

Verizon, Salesforce, Caterpillar, PepsiCo, Citigroup, Bank of America, General Motors, Wells Fargo, Apple, Accenture, P&G and Mastercard lost 2 to 3 percent.

Wallgreens Boots Alliance shares soared nearly 28 percent, after the company reported earnings of $265 million in the first quarter, compared to $67 million in the year-ago quarter.

Delta Air Lines climbed 9 percent. The company’s bottom line dropped in the first quarter. However, it announced that earnings will be greater than $7.35 per share in 2025, up more than 10 percent year-over-year, compared to a normalized 2024 earnings per share baseline.

Whirlpool, Alaska Air, United Airlines Holdings, American Airlines, Eli Lilly, Walmart, Target, and Home Depot also closed with solid gains.

Commodity, Currency Markets

Crude oil futures are jumping $1.28 to $77.85 a barrel after soaring $2.65 to $76.57 a barrel last Friday. Meanwhile, after surging $24.20 to $2,715 an ounce in the previous session, gold futures are tumbling $27.60 to $2,687.40 an ounce.

On the currency front, the U.S. dollar is trading at 157.05 yen versus the 157.73 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0214 compared to last Friday’s $1.0244.

Asia

Asian markets declined heavily on Monday amidst fears of an extended pause by the Federal Reserve attributed to stronger-than-expected payrolls data from the U.S. Data from China that showed a better-than-expected trade balance did not suffice to lift market sentiment. Markets in Japan were closed for a holiday.

China’s Shanghai Composite Index edged down 0.3 percent to finish trading at 3,159.84. The day’s trading ranged between 3,172.70 and 3,140.98. The Shenzhen Component Index closed flat at 9,796.18.

The Hang Seng Index of the Hong Kong Stock Exchange also slumped 1.0 percent from the previous close to finish trading at 18,874.14. The day’s trading range was between a high of 18,929.12 and a low of 18,671.49.

The Korean Stock Exchange’s Kospi Index also tumbled 1.0 percent to close trading at 2,489.56. The day’s trading range was between 2,483.73 and 2,513.93.

Australia’s S&P/ASX200 Index closed trading at 8,191.90, dropping 1.2 percent from the previous close of 8,294.10. The day’s trading range was between 8,160.70 and 8,294.10.

Casino operator The Star Entertainment Group jumped 13 percent after massive declines in the two previous sessions. Gold Road Resources, Karoon Energy, Paladin Energy and Deep Yellow all gained more than 3 percent.

Premier Investments plunged more than 15 percent in the aftermath of a trading update. Netwealth Group and NRW holdings both plunged more than 9 percent. Financial services business Hub24 declined 6.2 percent followed by software business Life360 that declined 5.4 percent.

The NZX 50 of the New Zealand Stock Exchange slipped 69 points or 0.53 percent to close trading at 12,827.33, versus the previous close of 12,895.98. Trading ranged between 12,780.38 and 12,895.98.

Synlait Milk gained 2.4 percent. Meridian Energy, Vital Healthcare Property Trust and Vector all gained more than a percent. Auckland International Airport also added close to a percent.

Cancer diagnostics company Pacific Edge tumbled more than 52 percent after it lost key U.S. Medicare coverage for its flagship test. Westpac Banking Corp declined 3.6 percent. KMD Brands, Kiwi Property Group and Serko all lost more than 2 percent.

Europe

European stocks are down in negative territory on Monday as fading prospects of any significant monetary easing by global central banks, including the Federal Reserve, the ECB and BoE, uncertainty about global economic growth and rising bond yields continue to hurt sentiment.

While the U.K.’s FTSE 100 Index is down by 0.4 percent, the French CAC 40 Index and the German DAX Index are both down by 0.5 percent.

In the UK market, IAG is down nearly 4 percent. Pearson, Easyjet, Hiscox, DS Smith, Barratt Redrow, Fresnillo, Rolls-Royce Holdings and M&G are lower by 2 to 3.4 percent.

Diageo, RightMove, Ashtead Group, Standard Chartered, Informa, 3i, Scottish Mortgage, Diploma, Melrose Industries, Halma, Persimmon, HSBC Holdings and BAE Systems are also notably lower.

Rentokil Initial is rising nearly 3.5 percent. Entain is up 2.5 percent, lifted by the company’s strong earnings guidance. Glencore, Centrica, Shell, ICP and BP are advancing 1 to 1.7 percent.

In the German market, Infineon, Deutsche Bank, Puma, Rheinmetall, Hannover Rueck, HeidelbergCement, Adidas, MTU Aero Engines, Munich RE, Brenntag, Zalando, Merck, SAP and Siemens are down 1 to 2.5 percent.

RWE is gaining about 2.3 percent. Porsche is up by about 2.1 percent. Deutsche Telekom is rising 1.4 percent, while E.ON and Symrise, both are up nearly 1 percent.

In the French market, STMicroElectronics is down 4 percent and Unibail Rodamco is lower by about 3.3 percent. Stellantis is down 2.7 percent after the company reduced its excess vehicle inventory in the U.S. by over 100,000 units in late 2024.

Publicis Groupe, Teleperformance, Saint-Gobain, AXA, Schneider Electric, Airbus Group, ArcelorMittal, Safran, Capgemini, Hermes International, Accor, Legrand and Kering are down 1 to 2.5 percent.

Orange, Engie, TotalEnergies and Bouygues are up in positive territory.

Data from the Labor Department Friday showed U.S. non-farm payroll employment surged by 256,000 in December, after jumping by a downwardly revised 212,000 jobs in November.

Economists had expected employment to climb by 160,000 jobs compared to the addition of 227,000 jobs originally reported for the previous month.

The unemployment rate in the U.S. edged down to 4.1 percent in December from 4.2 percent in November. The rate was expected to come in unchanged.

German bond yields have increased 0.92 percent overnight to 2.5915 percent. The yield which was at 2.568 percent at the previous close ranged between 2.567 percent and 2.6105 percent in the day’s trading, testing the highest levels since June 2024. Rising inflation expectations in the ECB survey and expectations of fewer rate cuts in the U.S. fueled the spike in yields.

The yield on the UK 10-year gilt climbed the highest level in over 16 years, rising to 4.9 percent, amid fading prospects of significant rate cuts by the Bank of England this year due to persistent concerns over inflation and economic uncertainties.

U.S. Economic News

No major U.S. economic data is scheduled to be released today.