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U.S. Stocks May Open Roughly Flat Following Recent Volatility

wallstreet oct04 18sep20 lt

After moving mostly lower over the two previous sessions, stocks may show a lack of direction in early trading on Friday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures down by just 1 point.

Traders may be reluctant to make significant moves following the substantial volatility seen over the past several sessions.

Stocks started the week on an upbeat note, regaining ground after falling sharply last week, but selling pressure re-emerged following the Federal Reserve's monetary policy announcement on Wednesday.

While the Fed indicated it plans to leave interest rates at near-zero levels for years to come, traders seem skeptical that will be enough to support the economy.

With the elections less than two months away, lawmakers currently seem unlikely to pass another stimulus bill to help the economy recover from the coronavirus pandemic.

Recent economic data suggests the rebound from the lockdown-induced economic collapse may be plateauing, raising concerns about the possibility of a double-dip.

Shortly after the start of trading, the University of Michigan is scheduled to release its preliminary reading on consumer sentiment in the month of September. The consumer sentiment index is expected to inch up to 75.0 in September after rising to 74.1 in August.

The Conference Board is also due to release its report on leading economic indicators in the month of August. Economists expect the leading economic index to jump by 1.3 percent.

Following the sharp pullback seen late in the session on Wednesday, stocks saw some further downside during trading on Thursday. The major averages all moved lower on the day, with the tech-heavy Nasdaq posting a particularly steep loss.

The major averages ended the session off their worst levels of the day but still firmly in the red. The Dow fell 130.40 points or 0.5 percent to 27,901.98, the Nasdaq tumbled 140.19 points or 1.3 percent to 10,910.28 and the S&P 500 slumped 28.48 points or 0.8 percent to 3,357.01.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index edged up by 0.2 percent, while China's Shanghai Composite Index spiked by 2.1 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.2 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 0.4 percent and 0.5 percent, respectively.

In commodities trading, crude oil futures are slipping $0.29 to $40.68 a barrel after climbing $0.81 to $40.97 a barrel on Thursday. Meanwhile, after plunging $20.60 to $1,949.90 an ounce in the previous session, gold futures are rising $7.40 to $1,957.30 an ounce.

On the currency front, the U.S. dollar is trading at 104.34 yen versus the 104.74 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1839 compared to yesterday's $1.1848.

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