Futures Pointing 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 following the steep drop seen in the previous session.

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 tariff 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.

The weakness that emerged early in the session came after the University of Michigan released a report showing consumer sentiment has unexpectedly deteriorated in February amid a surge by year-ahead inflation expectations.

The University of Michigan said its consumer sentiment index slumped to 67.8 in February after rising to 71.1 in January. Economists had expected the index to inch up to 72.0.

With the unexpected decrease, the consumer sentiment index dropped to its lowest level since hitting 66.4 in July 2024.

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

“Many consumers appear worried that high inflation will return within the next year,” said Surveys of Consumers Director Joanne Hsu. “This is only the fifth time in 14 years we have seen such a large one-month rise (one percentage point or more) in year-ahead inflation expectations.”

Stocks saw further downside after President Donald Trump said he plans to announce reciprocal tariffs on many countries next week, with the U.S. imposing tariffs on imports equal to the rates imposed on American exports.

Traders were also reacting to mixed U.S. jobs data, with a closely watched Labor Department report showing weaker than expected job growth in January but an unexpected decrease by the unemployment rate.

The report said non-farm payroll employment rose by 143,000 jobs in January compared to economist estimates for an increase of about 170,000 jobs.

Meanwhile, employment in December and November surged by upwardly revised 307,000 jobs and 261,000 jobs, respectively, reflecting a net upward revision of 100,000 jobs.

The Labor Department also said the unemployment rate dipped to 4.0 percent in January from 4.1 percent in December. The unemployment rate was expected to remain unchanged.

“An unemployment rate at 4% is considered very low, giving the Fed reason to keep fed funds unchanged in the near term,” said Jeffrey Roach, Chief Economist for LPL Financial.

Housing stocks saw substantial weakness amid a notable increase by treasury yields, dragging the Philadelphia Housing Sector Index down by 2.7 percent.

Significant weakness was also visible among retail stocks, as reflected by the 2.4 percent slump by the Dow Jones U.S. Retail Index.

A steep drop by Amazon (AMZN) weighed on the sector, with the online retail giant tumbling by 4.1 percent after reporting better than expected fourth quarter results but providing disappointing sales guidance for the current quarter.

Biotechnology, semiconductor and software stocks also saw considerable weakness, while airline stocks were among the few groups to buck the downtrend.

Commodity, Currency Markets

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.

Asia

Asian stocks ended mixed on Monday following U.S. President Donald Trump’s pledge to impose tariffs on all imports of steel and aluminum and introduce reciprocal tariffs on many countries this week in another major escalation of his trade policy overhaul.

Investors also looked ahead to Federal Reserve Chair Jerome Powell’s upcoming semi-annual congressional testimony to judge the costs of tariffs and other policy shifts on easing plans.

The U.S. dollar climbed amid the heightened tariff angst and on inflation concerns ahead of key U.S. inflation readings due this week.

Spot gold price jumped more than 1 percent to hit a new record high. Oil prices also moved higher in Asian trading after a string of weekly declines.

Chinese markets advanced as mixed inflation data raised hopes that Beijing could roll out more stimulus measures such as interest rate cuts or infrastructure spending to boost growth.

Chinese consumer inflation accelerated for the first time since August, helped by a burst of household spending around the Lunar New Year holiday, while the producer price index saw consistent declines, separate reports revealed.

The benchmark Shanghai Composite Index climbed 0.6 percent to 3,322.17 as China’s tit-for-tat import taxes on some American goods take effect.

Hong Kong’s Hang Seng index jumped 1.8 percent to 21,521.98, led by Chinese AI-related stocks. Baidu rallied 3.7 percent and Alibaba surged 5.5 percent.

Xiaomi Corp., which is reportedly working on a Snapdragon 8s Elite-powered midrange device, climbed 3.1 percent.

Japanese markets fluctuated before ending on a mixed not as Trump threatened tariffs on Japanese goods if the U.S. trade deficit with Tokyo is not equalized.

The Nikkei 225 Index finished marginally higher at 38,801.17, while the broader Topix Index settled 0.2 percent lower at 2,733.01.

Seoul stocks ended little changed, with the Kospi finishing marginally lower at 2,521.27. Hyundai Steel fell more than 2 percent and POSCO Holdings shed 0.8 percent.

Australian markets ended modestly lower, with mining stocks leading losses. The benchmark S&P/ASX 200 Index dipped 0.3 percent to 8,482.80, while the broader All Ordinaries Index ended 0.4 percent lower at 8,747.60.

BHP Group shares dropped nearly 1 percent, Rio Tinto gave up 1.2 percent and Fortescue Metals Group fell 1.5 percent.

“Australian steel and aluminium is creating thousands of good paying American jobs, and are key for our shared defence interests,” Trade Minister Don Farrell said in a statement.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index slipped 0.2 percent to 12,876.35.

Europe

European shares have moved mostly higher on Monday despite U.S. President Donald Trump’s threat to impose tariffs on all steel and aluminum imports into the United States and a pledge to impose other reciprocal tariffs on Tuesday or Wednesday.

Underlying sentiment was underpinned by hopes for more monetary easing by the European Central Bank after ECB Governing Council member Boris Vujcic said that expectations for three more rate reductions this year are reasonable.

Earlier in the day, a report compiled by S&P Global showed that U.K. job vacancies decreased the most since August 2020.

Vacancy numbers fell especially sharply for permanent worker, with the rate of contraction accelerating for the fifth successive month, as higher cost of employing staff due to the changes in government policies weighed on hiring activity,

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.

Higher oil prices boosted have energy stocks. BP has surged percent after activist investor Elliott Investment Management built a stake in the company.

Finland’s Nokia has shown a notable move to the upside after appointing Justin Hotard as its new CEO. Hotard currently leads the Data Center & AI Group at Intel.

Johnson Matthey, a global leader in sustainable technologies, has also jumped after naming Richard Pike as its new CFO.

Meanwhile, engineering company GTT Group has tumbled in Paris after announcing the resignation of its chief executive, Jean-Baptiste Choimet.

U.S. Economic News

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