U.S. equities look set to open lower on Monday, with futures suggesting the market may pause after a strong multi-day rebound last week.
The pullback appears driven by profit-taking, as traders look to capture gains after the major indices bounced sharply from their early-November declines. All three benchmarks have logged five straight days of advances, putting them back within reach of their record peaks.
Improved sentiment in recent sessions has been fueled by growing expectations of lower interest rates, supported by dovish signals from senior Federal Reserve officials. According to CME Group’s FedWatch Tool, there is now an 87.4% probability that the Fed will cut rates by 25 basis points at next week’s policy meeting.
Even so, upcoming U.S. economic releases could sway the Fed’s thinking and inject fresh volatility into markets throughout the week.
Friday recap
Following the Thanksgiving holiday, trading resumed on Friday with a half session, and stocks continued their pre-holiday momentum. Each of the major averages ended higher for the fifth day in a row, closing just shy of their session highs.
- Dow Jones Industrial Average: +289.30 points (+0.6%) to 47,716.42
- Nasdaq Composite: +151.00 points (+0.7%) to 23,365.69
- S&P 500: +36.48 points (+0.5%) to 6,849.09
Weekly performance:
- Nasdaq: +4.9%
- S&P 500: +3.7%
- Dow: +3.2%
Despite the strong recovery, the Nasdaq still ended November down 1.5%, though that was a substantial improvement from earlier in the month when it sat more than 7.7% below its highs. The Dow and S&P 500 each managed modest gains of 0.3% and 0.1% for the month.
The latest upswing has pushed the indexes well above their recent lows, as investors set aside earlier concerns over stretched valuations. Hopes for easier monetary policy have been a major driver of the rebound, reversing worries from earlier in November that the Fed might keep rates unchanged.
Trading volumes stayed muted on Friday due to the holiday weekend. An early market close, a brief outage at the Chicago Mercantile Exchange, and a quiet economic calendar also kept activity subdued.
Sector performance
Hardware makers led the session, with the NYSE Arca Computer Hardware Index jumping 2.5%. SanDisk (NASDAQ:SNDK) rallied 3.8% after being added to the S&P 500 ahead of Friday’s open.
Gold-related stocks also moved higher as bullion prices surged, lifting the NYSE Arca Gold Bugs Index by 2.1%.
Semiconductors, energy names, and software stocks posted solid gains, while pharmaceutical shares were among the weaker performers.
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