Bargain Hunting May Contribute To Initial Rebound On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to regain ground following the sharp pullback seen over the two previous sessions.

Traders may look to pick up stocks at reduced levels following the recent sell-off, which saw the Nasdaq and the S&P 500 pull back well off their record highs.

The steep drop seen last Friday came amid concerns about the economic impact of President Donald Trump's new tariffs, weaker than expected jobs data and a slump by shares of Amazon (AMZN).

Optimism the weak jobs data will lead the Federal Reserve to lower interest rates next month may also generate some buying interest.

According to CME Group's FedWatch Tool, the chances of a quarter point rate cut in September have jumped to 85.4 percent from 63.1 percent a week ago.

Following the downturn seen over the course of Thursday's session, stocks showed a more substantial move to the downside during trading on Friday. The major averages all moved sharply lower, with the Nasdaq and the S&P 500 pulling back well off Thursday's record intraday highs.

The major averages ended the day off their lows of the session but still firmly negative. The Nasdaq plunged 472.32 points or 2.2 percent to 47,231.61, the S&P 500 tumbled 101.38 points or 1.6 percent to 6,238.01 and the Dow slumped 542.40 points or 1.2 percent to 43,588.58.

For the week, the Dow plummeted by 2.9 percent, while the S&P 500 the Nasdaq dove by 2.4 percent and 2.2 percent, respectively.

The sell-off on Wall Street came amid concerns about the economic impact of President Donald Trump's tariffs, as the White House announced new tariff rates on dozens of countries.

The new tariffs range from just 10 percent to as high as 41 percent, and the White House said a 40 percent levy will be imposed on goods that have been transshipped to evade applicable duties.

"Investors have been caught off guard, having previously hoped Trump would kick the new tariff levels down the road pending further negotiations with foreign trade partners," said Russ Mould, investment director at AJ Bell.

He added, "Instead, we've got new rates galore and that means investors need to spend time understanding what that means for companies in their portfolio."

Negative sentiment was also generated in reaction to a closely watched Labor Department report showing much weaker than expected job growth in the month of July.

The Labor Department said non-farm payroll employment rose by 73,000 jobs in July, while economists had expected employment to jump by 110,000 jobs.

The report also showed much larger than normal downward revisions to job growth in May and June, with employment in the two months increasing by a combined 258,000 fewer jobs than previously reported.

With the downward revisions, employment in May edged up by 19,000 jobs, while employment in June crept up by 14,000 jobs.

The Labor Department also said the unemployment rate inched up to 4.2 percent in July from 4.1 percent in June, with the uptick matching expectations.

A steep drop by shares of Amazon (AMZN) also weighed on Wall Street, with the online retail giant tumbling by 8.3 percent after reporting better than expected second quarter results but providing disappointing operating income guidance for the current quarter.

Airline stocks turned in some of the market's worst performances on the day, with the NYSE Arca Airline Index plummeting by 4.3 percent.

Substantial weakness was also visible among oil service stocks amid a steep drop by the price of crude, as reflected by the 3.5 percent plunge by the Philadelphia Oil Service Index.

Computer hardware, retail and banking stocks are saw significant weakness, while pharmaceutical and housing stocks bucked the downtrend.

Commodity, Currency Markets

Crude oil futures are slumping $1.50 to $65.83 a barrel after tumbling $1.93 to $67.33 a barrel last Friday. Meanwhile, after surging $51.20 to $3,399.80 an ounce in the previous session, gold futures are climbing $15.50 to $3,415.30 an ounce.

On the currency front, the U.S. dollar is trading at 147.11 yen versus the 147.40 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1584 compared to last Friday's $1.1587.

Asia

Asian stocks ended mixed on Monday as soft U.S. jobs data stirred concerns over the impact of new tariffs on the world's largest economy but fueled bets on a Federal Reserve rate cut in September.

Some market-watchers say it might even be a 50-basis point move, twice the regular amount to make up the lost time.

Meanwhile, U.S. President Donald Trump fired the Bureau of Labor Statistics Director General over distrust in employment statistics and said Federal Reverse Chair Jerome Powell should be "put out to pasture," stoking fears of political influence on key institutions.

White House economic adviser Kevin Hassett said that Trump and his team would study whether firing the Fed Chair was an option.

Regional bonds rose, tracking U.S. peers, and the U.S. dollar index steadied after a sharp 1.5 percent decline on Friday, while gold was marginally lower below $3,360 per ounce after rallying sharply in the previous session on the soft jobs report.

Oil edged up slightly after OPEC+ confirmed plans to raise production by 547,000 barrels per day (bpd) in September, as widely expected.

Chinese and Hong Kong markets recovered after last week's sharp declines. China's Shanghai Composite Index rose 0.7 percent to 3,583.31, while Hong Kong's Hang Seng Index climbed 0.9 percent to close at 24,733.45.

Japanese markets led regional declines as concerns mounted over political instability and the corporate outlook.

The Nikkei 225 Index dove 1.3 percent to 40,290.70 as reports suggested the government may introduce an extra budget to ease U.S. tariff impact. The broader Topix Index slumped 1.1 percent to 2,916.20.

Automakers Honda and Toyota fell around 2 percent each on tariff worries. Credit Saison slumped 6.6 percent and Yamaha lot around 2 percent while chip maker Socionext surged 4.8 percent.

Seoul stocks bounced back after tumbling on Friday due to the government's tax increase proposal. The Kospi jumped 0.9 percent to 3,147.75 as reports suggested the ruling party might reconsider its tax revision proposal.

Australian markets ended marginally higher as resource stocks gained ground, offsetting declines in banks and energy stocks. Tech firm Block lost 4 percent ahead of its earnings release later in the week.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index dropped 0.4 percent to 12,684.04.

Europe

European stocks have moved notably higher on Monday after falling sharply in the previous session on worries about the impact from higher U.S. tariffs. Investors shrugged off data that showed Eurozone investors' morale deteriorated sharply in August.

The Eurozone Sentix Investor Confidence Index fell to -3.7 in August from 4.5 in July, turning negative for the first time in four months.

The German DAX Index is up by 1.4 percent, the French CAC 40 Index is up by 0.9 percent and the U.K.'s FTSE 100 Index is up by 0.5 percent.

Budget carrier Wizz Air Holdings has moved to the upside after reporting passenger statistics for July 2025.

Dutch postal firm PostNL NV has jumped after confirming its full-year guidance.

Britain's Lloyds Banking Group has also surged after saying it is assessing the impact of a U.K. court ruling relating to motor finance.

Meanwhile, UBS shares have declined. The Swiss banking giant said it would pay $300 million to resolve a case related to misselling of mortgage-linked investment in the U.S.

U.S. Economic News

The Commerce Department is scheduled to releases its report on new orders for manufactured goods in the month of June at 10 am ET. Factory orders are expected to plunge by 5.0 percent in June after spiking by 8.2 percent in May.