On Monday, stock futures exhibited upward momentum in an attempt by Wall Street to rebound from its recent weekly decrease.
Futures linked to the S&P 500 index demonstrated a 0.5% increase. Dow Jones Industrial Average futures also experienced a rise of 128 points, equivalent to a 0.4% gain. Meanwhile, Nasdaq-100 futures showed a climb of 0.6%.
Palo Alto Networks observed a significant 12% surge during premarket trading, following the release of earnings results on Friday that surpassed analysts’ predictions. Although the stock had declined by 16% throughout the month, it showed promising improvement.
Investors found themselves recovering from a decline in the previous week as the market navigated the sluggishness typical of the summer period. The Nasdaq Composite concluded the week with a decline of approximately 2.6%, marking its third consecutive weekly decrease—a pattern not observed since December. In parallel, the Dow experienced a 2.2% decline, its most notable downward trend since March. The S&P 500 also faced a decline of 2.1%, marking its third successive week of losses, a sequence unseen since February.
Investors absorbed the impact of increasing bond yields and vulnerabilities arising from China, casting a shadow over the markets during a period known for its subdued activity.
Quincy Krosby, Chief Global Strategist at LPL Financial, noted on Friday that the S&P 500 currently finds itself in a state of short-term oversold conditions. This technical assessment takes into account various factors, including investor sentiment and other intricate measures.
Currently, investors are in anticipation of the upcoming quarterly earnings report from Nvidia, a significant beneficiary of artificial intelligence, which is scheduled for Wednesday. Additionally, they are eagerly looking forward to an address on Friday morning by Federal Reserve Chair Jerome Powell during the central bank’s annual symposium held in Jackson Hole, Wyoming.
Barclays Advises Against Disregarding the Sell-off in the Bond Market
Barclays strategist Ben McLannahan cautioned investors against disregarding the ongoing sell-off in the bond market, despite the surge in Treasury yields to levels not seen in 15 years due to strong economic indicators. McLannahan emphasized the continuation of their advice to take a bearish stance on 2-year US Treasuries.
Yields have been climbing throughout this month as investors express concerns that central banks, particularly the Federal Reserve, might maintain interest rates at elevated levels for a longer duration than previously anticipated.
European Stocks Commence the Trading Session With Gains
At the start of Monday’s trading, the European Stoxx 600 index displayed an upward trend, showing a 0.5% increase by 8:50 a.m. London time.
Every sector demonstrated growth, with the oil and gas sector leading the way, showing a notable gain of 1.17%.
France’s CAC 40 index made an impressive advancement of 0.8%, while Germany’s DAX and the U.K.’s FTSE 100 both saw gains of 0.5% and 0.2% respectively.
Conclusion
Stock futures rose as Wall Street aimed to recover from the prior week’s dip. S&P 500, Dow Jones, Nasdaq-100 futures climbed. Palo Alto Networks surged despite earlier decline. Market rebounded from sluggishness. European stocks gained, led by oil. Investors awaited Nvidia earnings and Powell’s address. Barclays warned about bond sell-off impact.
