The major U.S. stock index futures indicate a roughly flat opening on Monday, with equities likely to trade without a clear direction following the significant gains witnessed last week.
Investors are expected to exhibit caution ahead of the Federal Reserve's monetary policy announcement on Wednesday. Although a rate cut is widely anticipated, there remains some discussion regarding its size.
CME Group's FedWatch Tool currently suggests a 65% probability of a half-point rate cut and a 35% likelihood of a quarter-point cut. Regardless of the rate cut's magnitude, the Fed is anticipated to continue reducing interest rates throughout the year.
In U.S. economic developments, the Federal Reserve Bank of New York reports that regional manufacturing grew in September for the first time in nearly a year.
Stocks ended mostly higher on Friday, extending the positive trend of previous sessions. The Nasdaq and S&P 500 closed higher for the fifth consecutive day, largely mitigating the losses recorded the previous week.
The major averages finished firmly in positive territory. The Dow increased by 297.01 points or 0.7% to reach 41,393.78, the Nasdaq rose by 114.30 points or 0.7% to 17,683.98, and the S&P 500 advanced by 30.26 points or 0.5% to 5,626.02.
For the week, the Nasdaq jumped 6.0%, the S&P 500 climbed 4.0%, and the Dow surged 2.6%.
Optimism about forthcoming interest rate decisions reinforced the buoyancy on Wall Street ahead of the Federal Reserve's policy meeting. Additionally, the University of Michigan released data indicating that U.S. consumer sentiment improved more than expected in September.
The University of Michigan reported that its consumer sentiment index rose to 69.0 in September from 67.9 in August, surpassing economists' expectations of 68.0.
The report also highlighted a continued decline in year-ahead inflation expectations, which fell for the fourth consecutive month.
Year-ahead inflation expectations edged down to 2.7% in September from 2.8% in August, marking the lowest level since December 2020.
Moreover, the Labor Department unveiled a report before the market opened, showing that import prices in the U.S. decreased slightly more than expected in August.
Interest rate-sensitive housing stocks notably increased, pushing the Philadelphia Housing Sector Index up by 2.8% to a record closing high.
Gold stocks also experienced significant gains due to a notable rise in the price of the precious metal, with the NYSE Arca Gold Bugs Index surging by 2.2%.
Steel stocks displayed substantial strength, reflected by the 2.1% increase in the NYSE Arca Steel Index.
Additional strength was seen among computer hardware, brokerage, and semiconductor stocks, which performed well alongside most other major sectors.
### Commodity and Currency Markets
Crude oil futures are rising by $0.53 to $69.18 a barrel after falling $0.32 to $68.65 a barrel last Friday. Following a surge of $30.10 to $2,610.70 an ounce in the previous session, gold futures are slightly down by $2.30 to $2,608.40 an ounce.
In the currency markets, the U.S. dollar is trading at 140.27 yen, down from 140.85 yen at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1120, compared to Friday's $1.1075.
### Asia
Asian stocks ended mixed on Monday in thin holiday trading, influenced by disappointing Chinese data and caution ahead of the Federal Reserve, Bank of Japan (BoJ), and Bank of England (BoE) policy meetings this week, with both the Japanese and U.K. central banks expected to keep rates steady.
Investors are also closely monitoring upcoming U.S. retail sales and industrial production data.
Additionally, former U.S. President Donald Trump announced he is "safe and well" following another apparent assassination attempt on Sunday.
The dollar weakened, while gold prices held near record highs as investors assessed the likelihood of a significant rate cut by the Federal Reserve on September 18.
Markets in China, Japan, South Korea, and Indonesia were closed for holidays.
Hong Kong's Hang Seng Index ended 0.3% higher at 17,422.12, reversing an early decline despite disappointing economic data from China over the weekend.
Chinese industrial production and retail sales grew less than expected in August, home prices fell at the fastest rate in nine years, and unemployment rose, intensifying concerns over the economic recovery and reinforcing the case for additional economic stimulus.**China's Interest Rate Decision Looms**
China's central bank is gearing up to determine its one-year loan prime rate and the five-year rate on Friday.
**Australian Markets Break Records**
Australian markets reached new heights, buoyed by soaring gold prices which benefited gold miners and optimism surrounding a potential Federal Reserve interest rate cut that boosted banks. However, energy and healthcare stocks lagged, tempering broader market gains. The S&P/ASX 200 Index edged up by 0.3% to close at 8,121.60, while the All Ordinaries Index gained 0.2% to finish at 8,341.10. In contrast, New Zealand's S&P/NZX-50 Index fell by 1.0% to 12,704.39.
**Europe**
European markets wavered on Monday as a slew of Chinese economic data came in below expectations. Industrial production and retail sales in China grew slower than anticipated in August, house prices fell at their fastest rate in nine years, and unemployment rose, fueling concerns over economic recovery and strengthening the case for additional stimulus.
China's central bank is set to announce its one-year and five-year loan prime rates on Friday. Investors are also focused on upcoming central bank decisions, including the Bank of England's rate announcement on Thursday.
The pound reached its highest level in over a week, and gold prices hovered near record levels as investors speculated a more aggressive Federal Reserve rate cut on Wednesday.
While Germany's DAX Index declined by 0.3%, France's CAC 40 fell by 0.1%, and the U.K.'s FTSE 100 remained virtually unchanged.
**Corporate News**
Italian oil and gas giant Eni saw gains following reports of a potential sale of additional shares in its renewables unit, Plenitude. Lender UniCredit also advanced, announcing a repurchase plan of up to €1.7 billion ($1.89 billion) of its own stock.
Playtech surged after the gambling technology company forecasted 2024 adjusted core profit to slightly exceed market expectations.
Ipsen SA rose in Paris following the cancellation of plans to commercialize a treatment for prostate cancer after a late-stage trial failed to meet its primary objectives.
Electrical supplies distributor Rexel soared after rebuffing an unsolicited preliminary bid from QXO, led by billionaire Brad Jacobs.
Vossloh AG shares climbed as the German rail technology firm secured a contract worth over €100 million with DB InfraGO AG, a unit of Deutsche Bahn AG.
Conversely, British insurer Phoenix Group Holdings plummeted after abandoning the sale process of its SunLife business.
**U.S. Economic News**
The Federal Reserve Bank of New York reported a resurgence in regional manufacturing for the first time in nearly a year, with its general business conditions index jumping to 11.5 in September from -4.7 in August. A positive index reading indicates growth, countering economists' expectations of a marginal rise to -3.9. The report also highlighted an increase in firms' optimism about future business conditions, with the index for future business activity rising to 30.6 in September from 22.9 in August.
