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U.S. Stocks Likely To Follow Overseas Markets Lower In Early Trading

wallstreet oct29 09may22 lt

Following the rollercoaster ride seen last week, stocks are likely to come under pressure 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 439 points.

Weakness in overseas markets is likely to carry over onto Wall Street amid concerns about the outlook for the global economy.

Traders seem worried aggressive moves by global central banks to contain inflation could lead to a period of stagflation or an outright recession.

A continued increase in treasury yields is likely to weigh on the markets, with the yield on the benchmark ten-year note once again reaching its highest levels since November 2018.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of key inflation data in the coming days.

The latest snapshot of inflation could impact expectations regarding how aggressively the Federal Reserve plans to raise interest rates.

Not long after the start of trading, the Commerce Department is scheduled to release its report on wholesale inventories in the month of March. Wholesale inventories are expected to surge by 2.3 percent.

Stocks fluctuated wildly over the course of the trading day on Friday before eventually ending the session mostly lower. With the drop on the day, the major averages extended the sell-off seen during trading on Thursday.

The tech-heavy Nasdaq tumbled 173.03 points or 1.4 percent to 12,144.66, once again hitting its lowest closing level in well over a year. The S&P 500 slid 23.53 points or 0.6 percent to a nearly one-year closing low of 4,123.34 and the Dow fell 98.60 points or 0.3 percent to a two-month closing low of 32,899.37.

During the extremely volatile week, the Nasdaq slumped by 1.5 percent, while the Dow and the S&P 500 both edged down by 0.2 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan's Nikkei 225 Index plunged by 2.5 percent, while South Korea's Kospi tumbled by 1.3 percent.

The major European markets have also shown significant moves to the downside on the day. While the French CAC 40 Index has slumped by 2 percent, the U.K.'s FTSE 100 Index is down by 1.8 percent and the German DAX Index is down by 1.5 percent.

In commodities trading, crude oil futures are tumbling $2.49 to $107.28 a barrel after jumping $1.51 to $109.77 a barrel last Friday. Meanwhile, after rising $7.10 to $1,882.80 an ounce in the previous session, gold futures are falling $16.80 to $1,866 an ounce.

On the currency front, the U.S. dollar is trading at 130.58 yen versus the 130.65 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0567 compared to last Friday's $1.0551.

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