Market US


The major U.S. index futures are currently pointing to a lower open on Monday, with stocks likely to extend the sharp pullback seen over the two previous sessions.

Weakness in overseas markets is likely to carry over onto Wall Street amid concerns about the outlook for the global economy.

Traders seem worried aggressive moves by global central banks to contain inflation could lead to a period of stagflation or an outright recession.

A continued increase in treasury yields is likely to weigh on the markets, with the yield on the benchmark ten-year note once again reaching its highest levels since November 2018.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of key inflation data in the coming days.

The latest snapshot of inflation could impact expectations regarding how aggressively the Federal Reserve plans to raise interest rates.

Stocks fluctuated wildly over the course of the trading day on Friday before eventually ending the session mostly lower. With the drop on the day, the major averages extended the sell-off seen during trading on Thursday.

The tech-heavy Nasdaq tumbled 173.03 points or 1.4 percent to 12,144.66, once again hitting its lowest closing level in well over a year. The S&P 500 slid 23.53 points or 0.6 percent to a nearly one-year closing low of 4,123.34 and the Dow fell 98.60 points or 0.3 percent to a two-month closing low of 32,899.37.

During the extremely volatile week, the Nasdaq slumped by 1.5 percent, while the Dow and the S&P 500 both edged down by 0.2 percent.

The lower close on Wall Street came following the release of a closely watched Labor Department report showing stronger than expected job growth in the month of April.

The report showed non-farm payroll employment surged by 428,000 jobs in April, matching the revised jump seen in March.

Economists had expected employment to climb by 391,000 jobs compared to the addition of 431,000 jobs originally reported for the previous month.

Meanwhile, the Labor Department said the unemployment rate came in unchanged at 3.6 percent versus expectations the rate would edge down to 3.5 percent.

With the report showing continued strength in the labor market, economists predicted the Federal Reserve will continue with its plans to raise interest rates relatively sharply over the coming months.

“Overall, with labor market conditions still this strong — including very rapid wage growth — we doubt that the Fed is going to abandon its hawkish plans because of the current bout of weakness in equities,” Ashworth said.

Worries about the outlook for interest rates may have weighed on Wall Street along with a continued increase in treasury yields.

Airline stocks moved sharply lower on the day, with the NYSE Arca Airline Index plummeting by 3.1 percent to a nearly two-month closing low.

Substantial weakness was also visible among biotechnology stocks, as reflected by the 2.8 percent plunged by NYSE Arca Biotechnology Index. The index ended the session at its lowest closing level in over two years.

Brokerage, networking and retail stocks also saw considerable weakness on the day, adding to the steep losses posted in the previous session.

On the other hand, energy stocks moved sharply higher over the course of the session, benefiting from a notable increase by the price of crude oil.

With crude for June delivery jumping $1.51 to $109.77 a barrel, the NYSE Arca Oil Index spiked by 3.1 percent to its best closing level in almost eight years.