The major U.S. index futures for Dow Jones, S&P and Nasdaq are currently pointing to a roughly flat open on Monday, with stocks likely to show a lack of direction after rebounding last Friday but still posting steep weekly losses.
Uncertainty about the near-term outlook for the markets may keep some traders on the sidelines following recent weakness, which saw the S&P 500 plunge into correction territory last Thursday.
Traders may also be reluctant to make significant moves ahead of the Federal Reserve’s monetary policy announcement on Wednesday.
While the Fed is almost universally expected to leave interest rates unchanged, traders will look to the accompanying statement as well as officials’ latest projections for clues about the outlook for rates.
The Fed may also address President Donald Trump’s new tariffs amid concerns about the economic impact of the trade policies.
Following the sell-off seen over the course of Thursday’s session, stocks showed a substantial move back to the upside during trading on Friday. The major averages all moved sharply higher, with the tech-heavy Nasdaq posting a standout gain.
The major averages reached new highs for the session going into the close of trading. The Nasdaq soared 451.07 points or 2.6 percent to 17,754.09, the S&P 500 surged 117.42 points or 2.1 percent to 5,638.94 and the Dow jumped 674.62 points or 1.7 percent to 41,488.19.
Despite the significant rebound on the day, the major averages still posted steep losses for the week. The Dow plunged by 3.1 percent, while the Nasdaq and the S&P 500 tumbled by 2.4 percent and 2.3 percent, respectively.
The rally on Wall Street came as some traders looked to pick up stocks at reduced levels following the steep drop seen on Thursday, which dragged the Nasdaq and the S&P 500 down to their lowest closing levels in six months.
The nosedive also pulled the S&P 500 into correction territory, as the index plunged by more than 10 percent from February’s record highs.
Positive sentiment may also have been generated in reaction to news the U.S. is likely to avoid a government shutdown after Senate Minority Leader Chuck Schumer, D-NY, said he would vote to advance a Republican spending bill funding the government through September.
While Democrats oppose the bill, Schumer argued allowing President Donald Trump to “take even much more power via a government shutdown is a far worse option.”
Meanwhile, traders largely shrugged off a report from the University of Michigan showing a substantial deterioration in consumer sentiment and a surge by inflation expectations in the month of March.
Steel stocks turned in some of the market’s best performances on the day, resulting in a 4.0 percent spike by the NYSE Arca Steel Index.
Substantial strength was also visible among computer hardware stocks, with the NYSE Arca Computer Hardware Index soaring by 3.5 percent after ending the previous session at a nearly four-month closing low.
Brokerage stocks also saw significant strength, as reflected by the 3.5 percent surge by the NYSE Arca Securities Broker/Dealer Index.
Semiconductor, software and banking stocks also showed notable moves to the upside amid a broad based rally on Wall Street.