FX.co ★ U.S. Stocks May Extend Rebound As Inflation Data Looms

Main U.S. index futures indicate a positive opening on Monday, suggesting that stocks may extend the recent rebound seen in the past sessions.

Alleviating worries about the economic outlook might drive further buying activity on Wall Street following the significant decline earlier this month.

However, overall trading could be somewhat muted as traders anticipate key economic reports later this week.

The Labor Department is set to release its producer and consumer price inflation reports on Tuesday and Wednesday, respectively, which will likely influence interest rate outlooks.

Expectations are strong that the Federal Reserve will cut interest rates next month, with CME Group's FedWatch Tool indicating divided probabilities between a quarter-point and half-point cut.

Given recent economic concerns, traders will also closely monitor reports on retail sales and industrial production.

Following Thursday's rally, stocks exhibited a rather lackluster performance on Friday but managed to close mostly higher.

The major indices closed off their daily highs but maintained positive territory. The Dow edged up 51.05 points, or 0.1%, to 39,497.54; the Nasdaq rose 85.28 points, or 0.5%, to 16,745.30; and the S&P 500 climbed 24.85 points, or 0.5%, to 5,344.16.

Wall Street's higher close came as stocks continued to recover from recent sell-offs triggered by economic outlook concerns.

With the session's upward move, the Nasdaq and the S&P 500 largely offset Monday's steep losses, closing the week only slightly lower.

For the week, the S&P 500 fell by less than a tenth of a percent, the Nasdaq dipped 0.2%, and the narrower Dow dropped 0.6%.

Despite the recovery, the major averages remain well below recent highs after significant declines the previous Thursday and Friday.

Traders may have been hesitant to make significant moves due to the lack of major U.S. economic reports ahead of this week's key data.

Among individual stocks, Expedia (EXPE) shares surged after the travel technology company reported better-than-expected second-quarter results.

Cloud computing company Akamai Technologies (AKAM) also showed significant strength, exceeding quarterly estimates and raising its full-year guidance.

Conversely, shares of e.l.f. Beauty (ELF) experienced pressure despite reporting better-than-expected fiscal first-quarter results.

Pharmaceutical stocks made a strong upward move, pushing the NYSE Arca Pharmaceutical Index up by 1.8%.

Gold stocks also displayed notable strength, reflected in the NYSE Arca Gold Bugs Index's 1.1% gain. The sector's strength followed a modest rise in gold prices.

Software and brokerage stocks also showed strength, while most other major sectors ended the day with only modest movements.

Commodity and Currency Markets

Crude oil futures are up $0.86 to $77.70 per barrel after rising $0.65 to $76.84 last Friday. Meanwhile, gold futures increased by $10.30 to $2,483.70 per ounce following a $10.10 rise to $2,473.40 in the previous session.

On the currency front, the U.S. dollar is trading at 147.60 yen, up from 146.61 yen at Friday's New York close. Against the euro, the dollar is at $1.0922, edging up from $1.0917 last Friday.

Asia

Asian markets displayed improved sentiment on Monday, with concerns about U.S. economic growth considered exaggerated. Nonetheless, gains were limited due to anticipation of the U.S. CPI data due on Wednesday. Markets in Japan were closed for a holiday.

China's Shanghai Composite Index dropped 0.1% to close at 2,858.20, with trading ranging between 2,869.27 and 2,851.30. The Shenzhen Component Index also fell 0.2% to 8,373.47.

Hong Kong's Hang Seng Index added 21 points, or 0.1%, to finish at 17,111.65, trading between 17,162.76 and 17,002.93.

South Korea's Kospi Index surged 1.2% to 2,618.30, within a trading range of 2,602.01 to 2,622.86.

Australia's S&P/ASX200 Index gained 36 points, or 0.5%, to close at 7,813.70, with trading between 7,777.70 and 7,836.80.

JB Hi-Fi, a retailer of home consumer products, saw its shares surge by 8.3% following the release of its half-yearly results. Similarly, Tabcorp Holdings rose close to 8%, while Bellevue Gold added 5.4%. Specialty retail business Super Retail Group and Polynovo both recorded increases exceeding 4%.

Conversely, Beach Energy plummeted over 12% following its fiscal 2024 results announcement. Aurizon Holdings also declined by 8.8%, while Strike Energy fell by 5.6%, Mineral Resources dipped by 3.8%, and Pilbara Minerals lost 2.9%.

The NZX 50 Index of the New Zealand Stock Exchange gained 38 points or 0.3%, closing at 12,281.25, up from the previous close of 12,243.46. Trading fluctuated between 12,214.24 and 12,326.55.

Vista Group International, a software company, topped the gains with a 5.2% surge. Polymer business Skellerup Holdings followed with a 3.2% increase. Restaurant Brands NZ, KMD Brands, and Manawa Energy all added more than 2% in the day's trading.

On the downside, Synlait Milk fell by 3.3%, while utilities business Mercury NZ lost 2.1%. Sky Network Television, Goodman Property Trust, and healthcare company Pacific Edge all declined by more than 1%.

Europe

European stocks showed slight increases amid cautious trading on Monday, with investors absorbing regional earnings updates, German wholesale prices data, and anticipating inflation data from the U.K. and U.S. later this week.

While the French CAC 40 Index dipped by 0.1%, the German DAX Index edged up by 0.2%, and the U.K.'s FTSE 100 Index rose by 0.4%.

In Germany, Rheinmetall shares soared by more than 7.5% after the company announced it had been commissioned to supply main battle tanks and armored recovery vehicles to the Czech Republic under a German government initiative to support Ukraine.

Hannover Rück climbed more than 4.5%. Puma, Commerzbank, Henkel, Munich RE, and Brenntag all saw gains ranging from 1 to 2%.

Vonovia declined by about 1.2%. Fresenius Medical Care, BMW, Bayer, and Mercedes-Benz also experienced moderate losses.

In France, Unibail Rodamco, Vivendi, TotalEnergies, Teleperformance, Societe Generale, STMicroelectronics, and Engie rose by 0.5 to 1%.

Kering fell by 1.6%, and AXA declined by about 1%. Bouygues, Essilor, Orange, and Vinci also showed weakness.

In the U.K. market, BT Group surged nearly 6.5%. Centrica gained 2.3%, while Standard Chartered, BAE Systems, Diploma, Entain, Legal & General, Coca-Cola, Barclays, BP, Marks & Spencer, Smith (DS), Endeavour Mining, Prudential, NatWest Group, and IMI all increased by 1 to 2%.

JD Sports Fashion dropped by 3.7%. B&M European Value Retail, Hikma Pharmaceuticals, and Frasers Group fell by 1.3 to 1.6%.

On the economic front, Germany's wholesale prices continued to fall in July, albeit at a marginal pace, according to data from Destatis.

Wholesale prices decreased by 0.1% year-over-year in July, following a 0.6% decline in June. The latest annual drop was primarily driven by an 8.4% decrease in chemical product prices and a 7.7% fall in the prices of iron, steel, and semi-finished products.

Month-over-month, wholesale prices rose by 0.3%, offsetting June's 0.3% decrease. Economists had expected a 0.2% monthly growth.

U.S. Economic News

No major U.S. economic data is scheduled for release today.