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U.S. Stocks May Regain Ground Following Recent Weakness

wallstreetmarch0220 20may22 lt

Stocks are likely to move to the upside in early trading on Friday, regaining ground following the weakness seen in the two previous sessions. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 1.1 percent.

Bargain hunting may contribute to initial strength on Wall Street, with some traders looking to pick up stocks at reduced levels.

The drop seen on Thursday dragged the Dow and the S&P 500 to their lowest closing levels in over a year, with the S&P 500 approaching bear market territory.

However, recent rebound attempts have not met with much success amid lingering concerns about the outlook for the global economy.

The worries may be partly offset by news that China cut its benchmark reference rate for mortgages in an effort to support the economy amid Covid-related lockdowns.

A lack of major U.S. economic data may still keep some traders on the sidelines following the release of a slew of data earlier this week.

Traders may look ahead to next week's reports on new home sales, durable goods orders, and personal income and spending as well as the minutes of the latest Federal Reserve meeting.

Following the sell-off seen on Wednesday, stocks saw substantial volatility during trading on Thursday. The major averages showed wild swings over the course of the session before closing in negative territory.

While the Nasdaq dipped 29.66 points or 0.3 percent to 11,388.50, the Dow and the S&P 500 once again ended the session at their lowest closing levels in over a year. The Dow slid 236.94 points or 0.8 percent at 31,253.13 and the S&P 500 fell 22.89 points or 0.6 percent to 3,900.79.

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Friday. Japan's Nikkei 225 Index jumped by 1.3 percent, while Hong Kong's Hang Seng Index spiked by 3 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has shot up by 1.4 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both up by 1.9 percent.

In commodities trading, crude oil futures are climbing $0.37 to $112.58 a barrel after jumping $2.62 to $112.21 a barrel on Thursday. Meanwhile, after surging $25.30 to $1,841.20 an ounce in the previous session, gold futures are rising $3.60 to $1,844.80 an ounce.

On the currency front, the U.S. dollar is trading at 127.90 yen versus the 127.79 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0577 compared to yesterday's $1.0588.

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