Following last week's strong upward movement, stocks may exhibit a lack of direction in early trading on Monday. Major index futures suggest a flat open for the markets, with S&P 500 futures down by a modest 0.1 percent.
This caution among traders comes as they await the Federal Reserve's monetary policy announcement on Wednesday. While a rate cut is widely anticipated, there is ongoing debate over its magnitude. According to CME Group's FedWatch Tool, there is a 65% probability of a half-point cut and a 35% chance of a quarter-point reduction.
Regardless of whether the Fed opts for a 25 or 50 basis point cut, expectations remain high for further rate decreases through the rest of the year.
In U.S. economic news, the Federal Reserve Bank of New York reported growth in regional manufacturing for the first time in nearly a year this September. The New York Fed's general business conditions index surged to a positive 11.5 from a negative 4.7 in August. Economists had predicted the index to inch up to negative 3.9. Furthermore, firms expressed increased optimism for future conditions, with the index for future business activity rising to 30.6 from 22.9.
Stocks continued to climb on Friday, extending the recent upward trend. The Nasdaq and the S&P 500 both closed higher for the fifth consecutive day, effectively erasing the steep losses from the previous week. The Dow advanced 297.01 points or 0.7% to 41,393.78, the Nasdaq gained 114.30 points or 0.7% to 17,683.98, and the S&P 500 rose by 30.26 points or 0.5% to 5,626.02.
For the week, the tech-heavy Nasdaq soared by 6%, the S&P 500 increased by 4%, and the Dow surged by 2.6%.
In overseas trading, stock markets across the Asia-Pacific region mostly moved higher on Monday. With several major markets closed for holidays, Hong Kong's Hang Seng Index and Australia's S&P/ASX 200 Index both rose by 0.3%.
In Europe, major markets are experiencing modest declines. The German DAX Index is down by 0.3%, the French CAC 40 Index has dipped by 0.1%, and the U.K.'s FTSE 100 Index is nearly unchanged.
In commodities trading, crude oil futures are up $0.53 to $69.18 a barrel, recovering from a $0.32 slide to $68.65 a barrel last Friday. Meanwhile, gold futures are down $2.30 to $2,608.40 an ounce after surging $30.10 to $2,610.70 an ounce in the prior session.
On the currency front, the U.S. dollar is trading at 140.27 yen, slightly down from 140.85 yen at Friday's close in New York. Against the euro, the dollar is trading at $1.1120 compared to last week’s $1.1075.
