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U.S. Stocks May Give Back Ground In Early Trading

wallstreet oct05 09dec19 lt

After trending higher over the past few sessions, stocks may give back some ground in early trading on Monday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 19 points.

Some traders may look to cash in on the recent strength in the markets, which helped lift the major averages back within striking distance of the record highs set late last month.

Lingering uncertainty about U.S.-China trade talks may weigh on Wall Street, as new 15 percent tariffs on $165 billion worth of Chinese imports are currently still set to take effect this coming Sunday.

The new round of tariffs could throw a wrench in negotiations over a phase on trade deal, which is reportedly being held up in part by a dispute over how much to roll back existing tariffs.

Rising tensions between the U.S. and North Korea could also lead to some caution among traders after North Korea conducted a "very important test" at a long-range missile launch site.

President Donald Trump warned North Korean leader Kim Jong Un risks losing "everything" if he acts in a hostile way, leading a North Korean official to describe the president as a "heedless and erratic old man."

Nonetheless, overall trading activity may be somewhat subdued, with a lack of major U.S. economic data keeping some traders on the sidelines.

Traders may look ahead to the Federal Reserve's monetary policy announcement on Wednesday, although the central bank is widely expected to leave interest rates unchanged.

Stocks moved sharply higher over the course of the trading day on Friday, extending the rebound seen over the two previous sessions. With the advance, the major averages climbed back within striking distance of their record highs.

The major averages pulled back off their highs going into the close but remained firmly positive. The Dow soared 337.26 points or 1.2 percent to 28,015.06, the Nasdaq surged up 85.83 points or 1 percent to 8,656.53 and the S&P 500 jumped 28.48 points or 0.9 percent to 3,145.91.

For the week, the major averages showed little change. The Dow and the Nasdaq both edged down by 0.1 percent, while the S&P 500 crept up by 0.2 percent.

In overseas trading, stock markets across the Asia-Pacific region moved modestly higher during trading on Monday. Japan's Nikkei 225 Index rose by 0.3 percent, while China's Shanghai Composite Index inched up by 0.1 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the French CAC 40 Index has slid by 0.5 percent, the German DAX Index and the U.K.'s FTSE 100 Index are down by 0.2 percent and 0.1 percent, respectively.

In commodities trading, crude oil futures are sliding $0.61 to $58.59 a barrel after climbing $0.77 to $59.20 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,467.40, up $2.30 from the previous session's close of $1,465.10. On Friday, gold plunged $18.

On the currency front, the U.S. dollar is trading at 108.44 yen compared to the 108.58 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1073 compared to last Friday's $1.1060.

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