Bargain Hunting May Contribute To Initial Rebound On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a sharply higher open on Monday, with stocks likely to regain ground following the sell-off seeing during last Friday's session.

Traders may look to pick up stocks at somewhat reduced levels following the steep drop seen over the course of the previous session.

The major averages plunged to their lowest levels in a month amid concerns about a U.S.-China trade war, with President Donald Trump threatening a "massive increase" in tariffs on Chinese imports in retaliation for its expansion of export controls on rare earths.

Trump stuck a more conciliatory tone in a post on social media platform Truth Social on Sunday, helping to ease the trade war worries.

"Don't worry about China, it will all be fine!" Trump said. "Highly respected President Xi just had a bad moment. He doesn't want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!"

Overall trading activity may be somewhat subdued, however, with the Columbus Day holiday potentially keeping some traders away from their desks.

A lack of major U.S. economic data may also keep some traders on the sidelines, as the economic calendar is likely to remain quiet throughout much of the week due to the ongoing government shutdown.

The Bureau of Labor Statistics has revealed the report on consumer price inflation that had been due to be released on Wednesday will now be released on Friday, October 24th.

While no other releases will be produced until the resumption of regular government services, the BLS noted the consumer price index data allows the Social Security Administration to meet statutory deadlines necessary to ensure the accurate and timely payment of benefits.

Due to the lack of economic data, trading this week may be driven by reaction to the latest earnings news, with financial giants Citigroup (C), JPMorgan Chase (JPM), Wells Fargo (WFC), Bank of America (BAC) and Morgan Stanley (MS) among the companies due to report their quarterly results.

Stocks came under pressure in morning trading on Friday and saw further downside as the session progressed, ending the day substantially lower.

The Nasdaq and the S&P 500 pulled back further off Wednesday's record closing highs, plunging to their lowest closing levels in a month.

The major averages ended the day just off their lows of the session. The Nasdaq plummeted 820.20 points or 3.7 percent to 22,204.43, the S&P 500 tumbled 182.60 points or 2.7 percent to 6,552.51 and the Dow slumped 878.82 points or 1.9 percent to 45,479.60.

With the steep drop on the day, the major averages also posted significant losses for the week. The Dow dove by 2.7 percent, while the S&P 500 and the Nasdaq plunged by 2.4 percent and 2.5 percent, respectively.

The sell-off on Wall Street came after President Donald Trump threatened to retaliate against China's expansion of export controls on rare earths.

Trump accused China of "becoming very hostile" in a post on social media platform Truth Social and threatened a "massive increase" in tariffs on Chinese products coming into the U.S.

In the post, Trump also said he would no longer meet with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation forum in South Korea, because "now there seems to be no reason to do so."

Trump's post raised concerns about an escalation of the trade war between U.S. and China and the potential impact on the global economy.

Traders may have used the early weakness that emerged on Wall Street as an opportunity to cash in some of the recent strength in the markets amid worries about valuations.

In U.S. economic news, a report released by the University of Michigan this morning showed its reading on U.S. consumer sentiment was virtually unchanged in the month of October.

The University of Michigan said its consumer sentiment index edged down to 55.0 in October from 55.1 in September. Economists had expected the index to slip to 54.2.

On the inflation front, the University of Michigan said year-ahead inflation expectations ebbed to 4.6 percent in October from 4.7 percent in September. Long-run inflation expectations held steady at 3.7 percent.

Trump's post led to substantial weakness among semiconductor and computer hardware stocks, with the Philadelphia Semiconductor Index and the NYSE Arca Computer Hardware Index plummeting by 6.3 percent and 5.8 percent, respectively.

Oil service stocks also moved sharply lower along with the price of crude oil, dragging the Philadelphia Oil Service Index down by 5.4 percent to its lowest closing level in nearly two months.

Steel, networking, banking and transportation stocks also showed significant moved to the downside, as broad based weakness emerged on Wall Street.

Commodity, Currency Markets

Crude oil futures are climbing $0.49 to $59.39 a barrel after plummeting $2.61 to $58.90 a barrel last Friday. Meanwhile, after jumping $27.80 to $4,000.40 an ounce in the previous session, gold futures are spiking $103.50 to $4,103.90 an ounce.

On the currency front, the U.S. dollar is trading at 152.17 yen versus the 151.15 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1568compared to last Friday's $1.1618.

Asia

Asian stocks fell sharply on Monday as the U.S. government shutdown entered its third week and trade tensions between the U.S. and China returned to the fore.

Regional markets fell across the board even as U.S. President Donald Trump posted conciliatory message about China tariffs on Truth Social after threatening a 100 percent tariff.

As economic worries mount, investors also awaited corporate earnings reports from prominent U.S. companies and guidance from the U.S. Federal Reserve.

Political and fiscal developments in Japan and Europe also kept investors on edge. Many world leaders, including Trump, are due to meet in Egypt today to discuss ceasefire plans for Gaza.

China's Shanghai Composite Index ended down 0.2 percent at 3,889.50, recouping most early losses after China's foreign trade showed surprising strength in September, with both exports and imports beating forecasts.

Hong Kong's Hang Seng Index slumped 1.5 percent to 25,889.48 on renewed Sino-U.S. trade tensions. Beijing on Sunday defended its latest export control measures on rare earths and related items as a response to U.S. aggression but stopped short of imposing new levies on U.S. products.

The Japanese markets were closed for National Sports Day after ending significantly lower on Friday.

Seoul stocks ended lower to snap a three-day winning run. The Kospi slid 0.7 percent to 3,584.55, with semiconductor-related shares pacing the declines.

Samsung Electronics fell 1.2 percent and SK Hynix lost 3 percent. LG Electronics rallied 2.5 percent after is third quarter operating profit exceeded market expectations.

Australian markets declined amid U.S.-China trade tensions and disappointing business updates from the likes of Treasury Wine and Qantas.

The benchmark S&P/ASX 200 Index dropped 0.8 percent to 8,882.80, while the broader All Ordinaries Index settled 0.9 percent lower at 9,183.30.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index closed 0.9 percent lower at 13,351.92, marking its biggest single-day loss since late August.

Europe

European stocks have moved mostly higher on Monday after U.S. President Donald Trump struck a more conciliatory tone on trade with China, saying that everything would be "fine" and that Washington was not looking to "hurt" China.

The focus was also on France, where Prime Minister Sebastien Lecornu, who was reappointed on Friday, unveiled his cabinet amid budget turmoil that is scaring businesses and investors.

On a light day on the economic front, data from Destatis showed German wholesale price inflation accelerated in September.

Wholesale selling prices increased 1.2 percent year-on-year in September. This followed a 0.7 percent rise in August and a 0.5 percent increase in July.

The German DAX Index and the French CAC 40 Index are both up by 0.2 percent, although the U.K.'s FTSE 100 Index has bucked the uptrend and edged down by 0.1 percent.

PSI Software shares have soared after private equity firm Warburg Pincus said it would launch a voluntary public takeover offer to buy the German software firm for more than 700 million euros ($813.26 million).

Sidetrade shares have also surged. The French order-to-cash platform has signed binding agreements to acquire 100 percent of the share capital of EzyCollect.

Exosens has also spiked after Theon International Plc announced plans to acquire a 9.8 percent stake in the French electro-optical technology specialist for €268.7 million.

Sweden' s Skanska has also risen after it signed a US$175 million (approximately SEK 1.7 billion) contract with Ridgeline Development Partners to construct a new residential and hotel complex in downtown Nashville, Tennessee.

Dutch neuro-technology company Onward Medical has also jumped after providing its business update for the third quarter of 2025.

British retailer Pets At Home has also advanced after launching the second tranche of its £25 million share buyback program.

Meanwhile, AstraZeneca has fallen after it became the second pharma group to reach an agreement with the Trump administration to lower drug prices in exchange for tariff relief.

U.S. Economic News

Philadelphia Federal Reserve President Anna Paulson is scheduled to speak before the National Association for Business Economics' 67th Annual Meeting at 12:10 pm ET.