Futures Pointing To Modestly Higher Open On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher open on Monday, with stocks likely to move to the upside after ending the previous session well off their worst levels but still mostly lower.

Optimism about the outlook for interest rates may contribute to initial strength on Wall Street following last Friday's weaker-than-expected U.S. employment data.

Following the release of a closely watched report showing employment increased by much less than expected in the month of August, CME Group's FedWatch Tool is currently indicating a 90.1 percent chance the Fed will lower rates by a quarter point later this month.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of inflation data that could impact the outlook for rates.

The Labor Department is scheduled to release reports on producer price inflation and consumer price inflation on Wednesday and Thursday, respectively.

Economists currently expect the annual rate of producer price growth in August to come in unchanged from July at 3.3 percent.

The annual rate of growth by consumer prices is expected to accelerate to 2. 9 percent in August from 2.7 percent in July, while the annual rate of growth by core consumer prices, which exclude food and energy prices, is expected to hold at 3.1 percent.

After failing to sustain an initial move to the upside, stocks came under pressure in early trading on Friday. The major averages pulled back into negative after reaching new record intraday highs.

The major averages climbed well off their worst levels as the day progressed but still closed in negative territory. The Dow slid 220.43 points or 0.5 percent to 45,400.86, the S&P 500 fell 20.58 points or 0.3 percent to 6,481.50 and the Nasdaq edged down 7.31 points or less than a tenth of a percent to 21,700.39.

For the week, the major averages turned in a mixed performance. The tech-heavy Nasdaq jumped by 1.1 percent and the S&P 500 rose by 0.3 percent, but the narrower Dow dipped by 0.3 percent.

The early downturn on Wall Street came as traders digested a closely watched Labor Department report showing much weaker than expected U.S. job growth in the month of August.

The report said non-farm payroll employment crept up by just 22,000 jobs in August after climbing by an upwardly revised 79,000 jobs in July.

Economists had expected employment to increase by 75,000 jobs compared to the addition of 73,000 jobs originally reported for the previous month.

The report also showed the uptick of 14,000 jobs that had been reported for June was downwardly revised to a decrease of 13,000 jobs.

Meanwhile, the Labor Department said the unemployment rate inched up by 4.3 percent in August from 4.2 in July, in line with economist estimates.

Traders initially reacted positively to the report amid optimism the data will convince the Federal Reserve to lower interest rates later this month.

Buying interest waned shortly after the start of trading, however, leading some traders to cash in the early strength amid concerns about the outlook for the economy.

"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.

Financial stocks turned in some of the market's worst performances on the day, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index slumping by 1.9 percent and 1.8 percent, respectively.

An extended slump by the price of crude oil also weighed on oil producer stocks, dragging the NYSE Arca Oil Index down by 1.6 percent.

On the other hand, gold stocks moved sharply higher along with the price of the precious metal, resulting in a 2.5 percent surge by the NYSE Arca Gold Bugs Index.

Steel, biotechnology and housing stocks also saw considerable strength, helping to offset the weakness in the aforementioned sectors.

Commodity, Currency Markets

Crude oil futures are jumping $1.25 to $63.12 a barrel after tumbling $1.61 to $61.87 a barrel last Friday. Meanwhile, after surging $46.60 to $3,653.30 an ounce in the previous session, gold futures are inching up $4.30 to $3,657.60 an ounce.

On the currency front, the U.S. dollar is trading at 147.73 yen versus the 147.43 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1734 compared to last Friday's $1.1717.

Asia

Asian stocks advanced on Monday as weak U.S. jobs data spurred expectations of Federal Reserve rate cuts, with some analysts anticipating a significant 50 basis point interest rate cut at the U.S. central bank's September 16-17 meeting.

Chinese stocks rebounded after posting their biggest weekly fall in five months last week. The benchmark Shanghai Composite Index rose 0.3 percent to 3,826.84, led by gains in the consumer staple sector.

Hong Kong's Hang Seng Index climbed 0.9 percent to 25,633.91 despite Chinese export and import growth in August missing forecasts.

Customs data showed that outbound shipments from China rose 4.4 percent year-on-year in August, marking the slowest growth in six months. Imports grew 1.3 percent following a 4.1 percent jump a month earlier.

Japanese markets led regional gains, while the yen fell sharply due to political uncertainty after Prime Minister Shigeru Ishiba stepped down Sunday under mounting pressure from the LDP following a significant defeat in the upper house elections.

The Nikkei 225 Index jumped 1.5 percent to 43,643.81 on hopes for economic measures that may be implemented under the next administration.

Investors also cheered data that showed Japan's economy expanded much faster than initially estimated in the second quarter, driven by upward revisions in private consumption and inventories. The broader Topix Index settled 1.1 percent higher at 3,138.20.

Seoul markets ended higher as construction stocks like GS Engineering & Construction and Daewoo Engineering & Construction rallied on efforts by the government to address the housing crunch.

The Kospi rose 0.5 percent to 3,219.59, with the upside capped by concerns over U.S. investments after a sweeping U.S. immigration raid at a Hyundai Motor Co.-LG Energy Solution Ltd. battery venture in Georgia.

Australian markets ended slightly lower, with banks and energy stocks taking a hit. The benchmark S&P/ASX 200 Index dipped 0.2 percent to 8,849.60, while the broader All Ordinaries Index closed 0.2 percent lower at 9,126.90.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index closed up 0.4percent at 13,281.14, extending gains for a third consecutive session.

Europe

European stocks are modestly higher on Monday ahead of the crucial French confidence vote later in the day, with Prime Minister Francois Bayrou facing almost certain defeat.

Investors shrugged off the results of a survey showed that investor morale in the euro zone plunged in September to its lowest level since April. The Sentix index for the region unexpectedly fell to -9.2 in September from -3.7 in August.

Elsewhere, Germany's industrial output expanded for the first time in four months in July, figures from Destatis showed. Industrial production rose 1.3 percent month-on-month in July, reversing June's decrease of 0.1 percent, mainly driven by 9.5 percent growth in the manufacture of machinery and equipment.

A separate report revealed that Germany's foreign trade surplus decreased in July as exports fell faster than imports.

Exports posted a monthly decrease of 0.6 percent in July, reversing a 1.1 percent recovery in June. Imports dropped slightly by 0.1 percent after rising 4.1 percent in a month ago.

The French CAC 40 Index is up by 0.5 percent, the German DAX Index is up by 0.4 percent and the U.K.'s FTSE 100 Index is up by 0.2 percent.

In corporate news, Swedish medical technology company Elekta AB has moved to the upside after naming a new Chief Financial Officer.

Homebuilder Vistry has rallied after it entered into a partnership with Homes England, a housing and regeneration agency, to accelerate development of large-scale sites across England.

Meanwhile, British insurer Phoenix Group Holdings has plunged after announcing interim results for the first half of 2025.

U.S. Economic News

The Federal Reserve is scheduled to release its report on consumer credit in the month of July at 3 pm ET. Consumer credit is expected to increase by $10.1 billion in July after climbing by $7.4 billion in June.