U.S. stock futures are pointing to a slightly higher open on Monday, as investors anticipate a rebound after last week’s session closed mostly lower, despite pulling back from intraday lows.
Optimism surrounding potential interest rate cuts appears to be supporting early gains following Friday’s weaker-than-expected U.S. employment report.
CME Group’s FedWatch Tool shows a 90.1% probability that the Federal Reserve will reduce rates by 25 basis points later this month, after the Labor Department reported that payrolls increased by just 22,000 in August, far below economists’ expectations of 75,000. The report also revised June’s employment figure downward from a 14,000-job gain to a 13,000-job decline, while the unemployment rate ticked up to 4.3% from 4.2%, in line with forecasts.
“In the near-term, weaker jobs data will increase the odds of a Fed rate cut, but could create shorter-term volatility, as a weaker labor market is not a sign of strength,” said Larry Tentarelli, Chief Technical Strategist for Blue Chip Daily Trend Report.
Trading activity may remain subdued ahead of this week’s inflation reports, with producer prices scheduled for Wednesday and consumer prices on Thursday. Economists expect the annual producer price increase to hold at 3.3% in August, while consumer prices are forecast to rise 2.9% from 2.7% in July. Core consumer prices, which exclude food and energy, are expected to stay at 3.1%.
Last Friday, stocks initially rose but reversed course after reaching intraday highs. The Dow closed down 220.43 points, or 0.5%, at 45,400.86; the S&P 500 fell 20.58 points, or 0.3%, to 6,481.50; and the Nasdaq dipped 7.31 points, or less than 0.1%, to 21,700.39. Over the week, the Nasdaq gained 1.1%, the S&P 500 added 0.3%, and the Dow lost 0.3%.
Sector performance was mixed. Financials lagged, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index dropping 1.9% and 1.8%, respectively. Oil producers also suffered from extended weakness in crude prices, sending the NYSE Arca Oil Index down 1.6%. In contrast, gold stocks surged 2.5% alongside rising gold prices, while steel, biotech, and housing sectors showed notable strength, partially offsetting declines in other areas.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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