U.S. Stocks May See Further Upside In Early Trading

Following the rally seen last Friday, stocks are likely to see further upside in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.3 percent.

Stocks may continue to benefit from optimism about the outlook for interest rates following last Friday’s weaker than expected reading on service sector activity.

Indications that China is finally reopening following the latest Covid-19 wave may also contribute to continued buying interest.

Trading activity may be somewhat subdued, however, as traders look ahead to release of a report on consumer price inflation on Thursday.

The report, which is expected to show a notable slowdown in the annual rate of consumer price growth, could have a significant impact on the outlook for interest rates.

After opening on a slightly cautious note, U.S. stocks turned in a fine performance on Friday, and the major averages all ended with strong gains.

The Dow ended with a gain of 700.53 points or 2.1 percent at 33,630.61. The S&P 500 surged 86.98 points or 2.3 percent to 3,895.08, while the Nasdaq jumped 264.05 points or 2.6 percent to 10,569.29.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index climbed by 0.6 percent, while Hong Kong’s Hang Seng Index jumped by 1.9 percent.

Most European stocks have also moved to the upside on the day. While the U.K.’s FTSE 100 Index is nearly unchanged, the French CAC 40 Index is up by 0.3 percent and the German DAX Index is up by 0.8 percent.

In commodities trading, crude oil futures are jumping $2.35 to $76.12 a barrel after inching up $0.10 to $73.77 a barrel last Friday. Meanwhile, after surging $29.10 to $1,869.70 an ounce in the previous session, gold futures are climbing $9.80 to $1,879.50 an ounce.

On the currency front, the U.S. dollar is trading at 132.13 yen versus the 132.08 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0695 compared to last Friday’s $1.0644.

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