Following the sell-off seen last Friday, stocks are likely to see further downside in early trading on Monday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 246 points.
Negative sentiment is likely to carry from the previous session, which saw the major averages plunged to their lowest levels in a month.
Concerns about the outlook for interest rates are likely to continue to weigh on the markets following Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole economic symposium.
Powell’s remarks were more hawkish than investors would have liked, signaling the Fed is likely to continue raising interest rates aggressively and maintain rates at a high level for an extended period.
The subsequent weakness on Wall Street reflects concerns the Fed’s battle against inflation will led to a continued slowdown by the economy.
Trading activity may be somewhat subdued, however, as traders look ahead to Friday’s closely watched monthly employment report.
With traders reacting negatively to Powell’s speech, stocks moved sharply lower during trading on Friday. The major averages more than offset the upward move seen over the two previous sessions, falling to their lowest levels in a month.
The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Dow plunged 1,008.38 points or 3 percent to 32,283.40, the Nasdaq dove 497.56 points or 3.9 percent to 12,141.71 and the S&P 500 plummeted 141.46 points or 3.4 percent to 4,057.66.
With the steep losses on the day, the major averages also moved notably lower for the week. The Nasdaq tumbled by 4.4 percent, while the Dow and the S&P 500 slumped by 4.2 percent and 4.0 percent, respectively.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index plunged by 2.7 percent, while Hong Kong’s Hang Seng Index slid by 0.7 percent.
The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index is down by 0.7 percent, the German DAX Index is down by 1 percent and the French CAC 40 Index is down by 1.2 percent.
In commodities trading, crude oil futures are rising $0.51 to $93.57 a barrel after climbing $0.54 to $93.06 a barrel last Friday. Meanwhile, after tumbling $21.60 to $1,749.80 an ounce in the previous session, gold futures are slipping $7.60 to $1,742.20 an ounce.
On the currency front, the U.S. dollar is trading at 138.43 yen versus the 137.64 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0012 compared to last Friday’s $0.9966.
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