U.S. Stocks May Regain Ground Following Disappointing September

wallstreet sept05 01oct21 lt

After ending the previous session sharply lower, stocks may move back to the upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 124 points.

Traders may look to pick up stocks at relatively reduced levels following the sell-off seen on the final day of a disappointing September.

The Dow ended Thursday's trading at its lowest closing level in three months, while the Nasdaq and the S&P 500 fell to two-month closing lows.

For the month of September, the Dow dove by 4.3 percent, while the Nasdaq and the S&P 500 plummeted by 5.3 percent and 4.8 percent, respectively. The S&P 500 saw its worst month since the early days of the coronavirus pandemic.

Trading activity may be somewhat subdued, however, as traders may be reluctant to go bargain hunting amid lingering concerns about inflation and the Federal Reserve scaling back its asset purchases.

Next week's monthly jobs report may be on traders' minds, as Fed officials have indicated the outlook for monetary policy will depend primarily on the strength of the labor market.

On the U.S. economic front, the Commerce Department released a report showing personal income edged up by slightly less than expected in the month of August.

The Commerce Department said personal spending crept up by 0.2 percent in August after jumping by 1.1 percent in July. Economists had expected income to rise by 0.3 percent.

Meanwhile, the report said personal spending climbed by 0.8 percent in August following a revised 0.1 percent dip in July.

Spending was expected to increase by 0.6 percent compared to the 0.3 percent uptick originally reported for the previous month.

Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of September.

The ISM's manufacturing PMI is expected to edge down to 59.6 in September from 59.9 in August, with a reading above 50 indicating growth in the sector.

The Commerce Department is also due to release its report on construction spending in the month of August. Construction spending is expected to rise by 0.3 percent.

Additionally, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of September. The consumer sentiment index is expected to be unrevised at 71.0.

Following the mixed performance seen on Wednesday, stocks moved sharply lower over the course of the trading session on Thursday. The Dow tumbled to a three-month closing low, while the Nasdaq and the S&P 500 both ended the day at their lowest closing levels in over two months.

The Dow plunged 546.80 points or 1.6 percent to 33,843.92 and the S&P 500 slumped 51.92 points or 1.2 percent to 4,307.54, while the Nasdaq spent the day bouncing back and forth across the unchanged line before closing down 63.86 points or 0.4 percent at 14,448.58.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday, with markets in China closed for a holiday. Japan's Nikkei 225 Index plummeted by 2.3 percent, while Australia's S&P/ASX 200 Index tumbled by 2 percent.

The major European markets have shown more modest moves to the downside on the day. While the U.K.'s FTSE 100 Index has dipped by 0.4 percent, the German DAX Index is down by 0.1 percent and the French CAC 40 Index is just below the unchanged line.

In commodities trading, crude oil futures are falling $0.68 to $74.35 a barrel after rising $0.20 to $75.03 a barrel on Thursday. Meanwhile, after surging $34.10 to $1,757 an ounce in the previous session, gold futures are slipping $3.60 to $1,753.40 an ounce.

On the currency front, the U.S. dollar is trading at 111.03 yen versus the 111.29 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1604 compared to yesterday's $1.1580.

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