U.S. stock index futures are pointing to a stronger start on Monday, indicating that equities may attempt to recover some of the losses recorded during last week’s sharp decline.
Part of the early strength could come from bargain hunters stepping in after the recent selloff, as some investors look to accumulate shares that have fallen to lower price levels.
The downturn last week pushed the major U.S. indices to their weakest closing levels in more than eight months.
Market sentiment may also get a boost from optimistic remarks by President Donald Trump regarding the ongoing conflict in the Middle East.
In a Truth Social post earlier today, Trump said the United States had made “great progress” in discussions with a “new, and more reasonable, regime” aimed at ending military operations in Iran.
At the same time, Trump warned that if an agreement is not reached soon, the United States will “conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!)”.
Even so, gains could remain limited as crude oil prices continue to move higher amid ongoing concerns about the economic fallout from the Middle East conflict.
Stocks posted sharp losses during Friday’s session, extending declines from the previous trading day. The major indices fell early in the session and continued sliding deeper into negative territory as trading progressed.
Although the market recovered somewhat from the day’s lows toward the close, the main averages still ended the session with sizeable losses. The Nasdaq fell 459.72 points, or 2.2%, to 20,948.36, the Dow dropped 793.47 points, or 1.7%, to 45,166.64, and the S&P 500 declined 108.31 points, or 1.7%, finishing at 6,368.85.
For the week overall, the Nasdaq lost 3.2%, the S&P 500 declined 2.1%, and the Dow slipped 0.9%. These declines pushed the major averages to their lowest closing levels in more than eight months.
The continued rally in oil prices weighed on investor sentiment. Brent crude futures climbed back above $110 per barrel after rising by more than 5% during Thursday’s trading session.
The extended rise in oil prices came despite President Trump extending by 10 days the pause on potential attacks against Iran’s energy infrastructure, moving the deadline to April 6.
Trump said in another Truth Social post that negotiations with Iran were “going very well,” although Iranian state media reported that Tehran had “responded negatively” to a U.S. peace proposal.
“Comments from Washington and Tehran about a potential peace process seem to come from parallel worlds, with the former indicating talks are going well while the latter effectively denies talks are even happening,” said AJ Bell investment director Russ Mould.
“For now, fighting continues and the path out of the current crisis remains unclear,” he added. “Oil prices, probably the best indicator, remain elevated and have reached $110 per barrel again.”
Mould also warned that if crude prices remain elevated for an extended period, fears of renewed inflationary pressure could intensify.
Airline stocks were among the worst performers on Friday, sending the NYSE Arca Airline Index down 4.7%.
Biotechnology, software, and computer hardware companies also experienced notable declines, contributing to the heavy losses in the technology-focused Nasdaq.
Financial, retail, and healthcare stocks also moved significantly lower, while gold-related shares resisted the broader downturn as the price of the precious metal surged.
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