In the aftermath of last Friday's sharp market decline, stocks are anticipated to experience further losses as trading commences this Monday. Current major index futures suggest a markedly lower market opening, with S&P 500 futures down by 1.0%.
The upward trend in U.S. Treasury yields is causing apprehension among investors, as the benchmark ten-year note yield surpassed 4.6% for the first time since late May on Friday. Recent increases in Treasury yields can be partially attributed to the Federal Reserve's revised forecast, which predicts fewer interest rate cuts in 2025 than previously anticipated.
Moreover, these rising yields might reflect concerns about how President-elect Donald Trump's policies could affect the U.S. budget deficit. Shares of Boeing (BA) are also expected to impact the Dow negatively due to an inspection mandate from South Korea's Transport Ministry. This follows a tragic Jeju Air crash involving the B737-800 aircraft over the weekend.
Despite these developments, trading activity might remain muted, as many traders are likely to be absent ahead of the New Year's Day holiday on Wednesday.
Shortly after the market opens, MNI Indicators is set to release its report on December’s business activity in the Chicago area. Projections indicate an increase in the Chicago business barometer to 42.5 in December from 40.2 in November, although figures below 50 still signify contraction.
Additionally, the National Association of Realtors will publish its data on November’s pending home sales, expected to rise by 0.7% following a 2.0% increase in October.
Last Friday, U.S. stocks fell significantly, with major indexes closing distinctly lower. The tech-heavy Nasdaq faced the sharpest decline as the ten-year note yield hit an almost eight-month high. Specifically, the Dow Jones Industrial Average fell by 333.59 points, or 0.8%, closing at 42,992.21, after hitting a low of 42,761.56. The S&P 500, reaching a low of 5,932.95, ended at 5,970.84, down by 66.75 points or 1.1%, and the Nasdaq dropped 298.33 points or 1.5% to close at 19,722.03, recovering slightly from a low of 19,533.40.
Despite these daily losses, the Dow achieved a weekly gain of approximately 1.4%, while the S&P 500 and Nasdaq both rose by over 1.5% throughout the week.
Around the globe, Asian-Pacific stock markets mostly declined on Monday. Japan's Nikkei 225 Index fell by 1.0%, and South Korea's Kopsi saw a 0.2% dip, although China's Shanghai Composite Index resisted the trend, inching up by 0.2%.
In European markets, a bearish sentiment prevailed, with the French CAC 40 Index decreasing by 0.3%, and both the U.K.'s FTSE 100 Index and the German DAX Index dropping by 0.4%.
In commodities, crude oil futures are rising, adding $0.38 to reach $70.98 a barrel after a previous leap of $0.98 to $70.60 a barrel on Friday. Gold futures, after a previous session fall of $22 to $2,631.90 an ounce, are modestly increasing by $4 to $2,635.90 an ounce.
On the currency side, the U.S. dollar is trading at 157.49 yen, down from the 157.87 yen it fetched at the close of New York trading on Friday. Against the euro, it stands at $1.0432, compared to last Friday's $1.0426.
The material has been provided by InstaForex Company -
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