U.S. Stocks Likely To Come Under Pressure In Early Trading

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Stocks are likely to come under pressure in early trading on Monday, extending the sharp pullback seen in the previous session. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 33 points.

Concerns about the outlook for interest rates may contribute to initial weakness on Wall Street ahead of this week's economic symposium in Jackson Hole, Wyoming.

In a research note, Chris Senyek, chief investment strategist at Wolfe Research, suggested Fed Chair Jerome Powell will sound a more hawkish tone in his comments at the conference.

"Fed Chair Powell is likely to sound meaningfully more hawkish during his Jackson Hole speech on Friday morning at 10am ET than he did at his July 27th press conference, when he said the fed funds rate is already back to neutral," Senyek said.

He added, "As we've previously discussed at length, we believe that Fed would have to hike the fed funds rate to 4.5%+ to set inflation on a sustainable path back toward the FOMC's long-term 2% target."

Overall trading activity may be somewhat subdued, however, as traders look ahead to the Jackson Hole symposium as well as some key U.S. economic data.

After ending Thursday's choppy session modestly higher, stocks showed a substantial move back to the downside during trading on Friday. The major averages came under pressure early in the session and remained firmly negative throughout the day.

The major averages climbed off their worst levels in the final hour of trading but remained firmly negative. The Dow slid 292.30 points or 0.9 percent to 33,706.74, the Nasdaq plunged 260.12 points or 2 percent to 12,705.22 and the S&P 500 tumbled 55.26 points or 1.3 percent to 4,228.48.

With the drop on the day, the major averages all moved lower for the week, with the Nasdaq and the S&P 500 snapping four-week winning streaks.

While the Nasdaq dove by 2.6 percent, the S&P 500 slumped by 1.2 percent and the narrower Dow edged down by 0.2 percent.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index fell by 0.5 percent, while China's Shanghai Composite Index rose by 0.6 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the German DAX Index has plunged by 2.1 percent, the French CAC 40 Index is down by 1.6 percent and the U.K.'s FTSE 100 Index is down by 0.4 percent.

In commodities trading, crude oil futures are slipping $0.42 to $90.35 a barrel after rising $0.27 to $90.77 a barrel last Friday. Meanwhile, after falling $8.30 to $1,762.90 an ounce in the previous session, gold futures are tumbling $20.50 to $1,742.40 an ounce.

On the currency front, the U.S. dollar is trading at 137.16 yen versus the 136.97 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $0.9996 compared to last Friday's $1.0037.

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