U.S. Stocks May Lack Direction Ahead Of Economic Data, Nvidia Earnings

(RTTNews) - The major U.S. index futures are currently pointing to a roughly flat open on Monday, with stocks likely to show a lack of direction after recovering from an early slump to end last Friday's trading little changed.

Traders may be reluctant to make significant moves as they await the release of U.S. economic data that was delayed due to the recently ended government shutdown.

The Commerce Department is due to kick off the release its delayed data this morning with the release of a report on construction spending in August.

Reports on factory orders and the U.S. trade deficit in August are also due to be released in the coming days along with the monthly jobs report for September.

While the reports will be more backward looking than traders would prefer, the data could still impact the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting in December.

CME Group's FedWatch Tool is currently indicating a 57.4 percent chance the Fed will leave rates unchanged next month and a 42.6 percent chance of another quarter point rate cut.

AI darling and market leader Nvidia (NVDA) is also likely to be in focus ahead of the release of its third quarter financial results after the close of trading on Wednesday.

The strength of Nvidia's results and its guidance could have a significant impact on the markets amid recent concerns about AI valuations.

Following the sell-off seen during Thursday's session, stocks saw further downside in early trading on Friday but showed a significant recovery attempt as the day progressed.

The Nasdaq and the S&P 500 climbed well off their lows and into positive territory before eventually ending the day roughly flat.

The tech-heavy Nasdaq inched up 30.23 points or 0.1 percent 22,900.59, while the S&P 500 edged down 3.38 points or 0.1 percent to 6,734.11.

The narrower Dow, on the other hand, pulled back further off the record closing high set on Wednesday, sliding 309.74 points or 0.7 percent to 47,147.48.

After seeing considerable volatility over the past few days, the major averages turned in a mixed performance for the week. The Nasdaq fell by 0.5 percent, while the S&P 500 crept up by 0.1 and the Dow rose by 0.3 percent.

Weakness among technology stocks continued to weigh on Wall Street early in the session amid lingering valuation concerns.

However, tech heavyweights Nvidia (NVDA), Palantir Technologies (PLTR) and Tesla (TSLA) moved to the upside over the course of the session after initial weakness.

While some traders used the initial slump as an opportunity to pick up stocks at relatively reduced levels, buying interest remained somewhat subdued amid uncertainty about the outlook for interest rates.

Recent comments from Federal Reserve officials as well as indications key U.S. economic data may never be released due to the government shutdown have reduced confidence the central bank will continue lowering interest rates next month.

Despite the recovery attempt by the broader market, airline stocks extended Thursday's slump, dragging the NYSE Arca Airline Index down by 2.0 percent.

Notable weakness was also visible among retail stocks, as reflected by the 1.1 percent loss posted by the Dow Jones U.S. Retail Index.

On the other hand, energy stocks moved sharply higher along with the price of crude oil, driving the NYSE Arca Oil Index up by 2.0 percent and the Philadelphia Oil Service Index up by 1.7 percent.

Computer hardware and software stocks also saw some strength on the day, regaining ground after helping lead the markets lower in the previous session.

Commodity, Currency Markets

Crude oil futures are rising $0.27 to $60.36 a barrel after surging $1.40 to $60.09 barrel last Friday. Meanwhile, after plunging $100.30 to $4,094.20 an ounce in the previous session, gold futures are slipping $14.30 to $4,079.90 an ounce.

On the currency front, the U.S. dollar is trading at 154.87 yen versus the 154.54 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1592 compared to last Friday's $1.1620.

Asia

Asian shares ended mixed on Monday as investors braced for a barrage of U.S. economic data and a spat over Taiwan threatened ties between China and Japan.

The U.S. Commerce Department's Bureau of Economic Analysis said on Friday it was working to update its schedule of economic data releases affected by the recently ended government shutdown.

The September non-farm payrolls report is due to be released on Thursday, but more up-to-date labor and price figures are not due until next month.

The dollar gained in Asian trading while gold edged lower as investors scaled back expectations of a December rate cut from the U.S. Federal Reserve following cautious comments from Fed officials. Oil prices fell nearly 1 percent after a Russian export terminal resumed operations.

China's Shanghai Composite Index dropped 0.5 percent to 3,972.04 as a diplomatic rift with Japan worsened and the United States said it aims to finalize a rare earths deal with China by Thanksgiving. Hong Kong's Hang Seng Index fell 0.7 percent to 26,384.28 on Fed policy uncertainty.

Japanese markets ended slightly lower and the yen was steady after data showed the Japanese economy contracted by 0.4 percent in the July-September quarter, its first setback in six quarters.

The Nikkei 225 Index edged down 0.1 percent to 50,323.91, while the broader Topix Index settled 0.4 percent lower at 3,347.53. Retail and tourism-related stocks bore the brunt of the selling after China warned its citizens not to travel to Japan.

Fast Retailing lost 5.3 percent and Isetan Mitsukoshi Holdings plunged 11.3 percent. Sumitomo Mitsui Financial Group rallied 5.5 percent after the country's second-largest banking group raised its profit forecast.

Seoul stocks rallied as semiconductor shares surged ahead of Nvidia earnings due after the U.S. market close on Wednesday. The Kospi jumped 1.9 percent to 4,089.25. Market bellwether Samsung Electronics climbed 3.5 percent and chip giant SK Hynix soared 8.2 percent.

Australian markets recovered from an early slide to end on a flat note. Financials lost ground, offsetting gains in the energy sector. Lender Commonwealth Bank of Australia fell 1 percent to a seven-month low.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index rose 0.3 percent to 13,499.04 ahead of important company results and trading updates due later this week.

Europe

European stocks have moved mostly lower during traing on Monday due to concerns about an artificial intelligence bubble and global growth.

Amid a lack of catalysts, investors looked ahead to the release of U.S. economic data and earnings from AI-darling Nvidia for direction.

The German DAX Index is down by 0.7 percent, the French CAC 40 Index is down by 0.5 percent and the U.K.'s FTSE 100 Index is down by 0.3 percent.

In corporate news, SIG Group shares have surged. The Swiss packaging solutions provider has appointed Mikko Keto as its new Chief Executive Officer.

Sandoz has also moved to the upside. The global leader in affordable medicines announced that TYRUKO or natalizumab-sztn is available to patients in the United States.

British defense and security company QinetiQ has also risen after launching the second tranche of its share buyback program.

U.S. Economic News

New York Federal Reserve President John Williams is scheduled to deliver welcome remarks before the 2025 Governance and Culture Reform Conference at 9 am ET.

At 10 am ET, the Commerce Department is due to release its report on construction spending in the month of August. Construction spending is expected to edge down by 0.1 percent.

Minneapolis Federal Reserve President Neel Kashkari is scheduled to moderate a fireside chat and audience Q&A with Christophe Beck, CEO of Ecolab, at the November luncheon for the Economic Club of Minnesota at 1 pm ET.