U.S. Stocks May Regain Ground Following Last Week's Sell-Off

(RTTNews) - Following the sell-off seen last Friday, stocks are likely to move back to the upside in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.6 percent.

Traders may look to pick up stocks at somewhat reduced levels following the steep drop seen last week, which dragged the Nasdaq down to its lowest levels in nearly a month.

Optimism the Federal Reserve will lower interest rates later this month may also contribute to initial strength on Wall Street despite lingering concerns about the outlook for the U.S. economy.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of closely watched reports on consumer and producer price inflation later this week.

The reports are expected to show a slowdown by the annual rate of consumer price growth but an acceleration by the annual rate of producer price growth.

While the Fed is almost universally expected to begin lowering interest rates later this month, the data could impact expectations about the pace of rate cuts.

CME Group's FedWatch Tool is currently indicating a 75.0 percent chance the Fed will lower rates by 25 basis points and a 25.0 percent chance of a 50 basis point rate cut.

With traders reacting negatively to the monthly jobs report, stocks moved sharply lower during trading on Friday. The major averages all showed significant moves to the downside on the day, with the tech-heavy Nasdaq tumbling to its lowest closing level in almost a month.

The major averages finished the day near their lows of the session. The Nasdaq plummeted 436.83 points or 2.6 percent to 16,690.83, the S&P 500 plunged 94.99 points or 1.7 percent to 5,408.42 and the Dow slumped 410.34 points or 1.0 percent to 40,345.41.

For the holiday-shortened week, the Nasdaq saw a 5.8 percent nosedive, the S&P 500 plummeted by 4.3 percent and the Dow tumbled by 2.9 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index fell by 0.5 percent, while China's Shanghai Composite Index slumped by 1.1 percent.

Meanwhile, the major European markets have moved to the upside on the day. While the U.K.'s FTSE 100 Index is up by 0.6 percent, the French CAC 40 Index is up by 0.5 percent and the German DAX Index is up by 0.4 percent.

In commodities trading, crude oil futures are climbing $0.67 to $68.34 a barrel after tumbling $1.48 to $67.67 a barrel last Friday. Meanwhile, after falling $18.50 to $2,524.60 an ounce in the previous session, gold futures are rising $7.50 to $2,532.10 an ounce.

On the currency front, the U.S. dollar is trading at 143.17 yen versus the 142.30 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1047 compared to last Friday's $1.1004.