Following a strong close to last week, the stock market is expected to continue its upward trajectory this coming Monday. The major index futures, including the S&P 500, are forecasting a positive opening for the markets, with a potential rise of 0.5 percent.
The expected increase might be due to the market’s positive momentum from the previous two trading sessions. This optimism is largely attributed to the potential for favourable interest rates, fuelled by Federal Reserve Chair Jerome Powell's cautious comments and the gradual job growth seen in April.
Investors displaying boosted confidence in a potential rate cut in the subsequent months, the likelihood of rates dropping by September is currently estimated at 91.2 percent, according to readings from the CME Group's FedWatch Tool.
To note, trading may be slightly subdued due to the absence of any significant U.S. economic data, possibly causing some traders to wait it out. With a fairly quiet economic calendar this week, the preliminary consumer sentiment data for May and potential comments from several Fed officials might turn some heads.
In terms of individual stocks, media giant Paramount Global is seeing a dramatic increase in pre-market trading, following reports that it has commenced negotiation talks with a bidding group led by Sony Pictures Entertainment and private equity firm Apollo. Tyson Foods is also predicted to perform well after the meat processing company reported quarterly earnings that exceeded analysts' estimates.
On the downside, Spirit Airlines may face a slump due to worse than expected Q1 loss and a disappointing revenue guidance for Q2. Victoria's Secret is also experiencing considerable pre-market weakness after a significant downgrade by Morgan Stanley.
After last Thursday's rally, the stock market experienced another upward surge on Friday. The major averages rose significantly, with Nasdaq taking the lead. All three - Dow, Nasdaq, and S&P 500 showed positive results.
Asian and European markets have generally followed a similar trend, mostly delivering positive results, barring markets in Japan and South Korea that were closed for holidays.
In terms of commodities, crude oil futures are on the upswing with a rise of $0.67 to $78.78 per barrel. Gold futures are also seeing an increase, up by $16.70 to $2,325.30 per ounce.
On the currency front, the U.S. dollar is trading higher against the yen and the euro, compared to its status at the close of trading in New York last Friday.
