Futures Pointing 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 after moving notably lower to close out the previous week.

Traders may look to pick up stocks at somewhat reduced levels following the sharp pullback seen over the two previous sessions.

Tech stocks may help lead the rebound after a recent sell-off, as reflected by the 0.9 percent jump by the tech-heavy Nasdaq 100 futures.

A pullback by the price of crude oil may also contribute to initial strength on Wall Street, with Brent crude oil futures only modestly higher after surging above $90 a barrel earlier in the day.

Crude oil prices gave back ground after Iran Foreign Ministry spokesperson Esmail Baghaei said Tehran said Tehran could pursue negotiations based on national interests.

Baghaei comments to reporters came after the U.S. completed the ninth consecutive evening of strikes against Iran.

"Oil prices have pulled back from their overnight highs on reports that Iran has received new proposals for negotiations, raising hopes that diplomatic channels remain open despite the recent escalation in hostilities," said Daniela Hathorn, Senior Market Analyst at Capital.com.

She added, "While the conflict remains far from resolved, the prospect of renewed talks has eased immediate concerns over further disruptions to oil supply and shipping through the Strait of Hormuz."

Following the pullback seen in Thursday's session, stocks showed another move to the downside during trading on Friday. The major averages all moved notably lower, with the Nasdaq showing another significant decline.

The Nasdaq tumbled 361.70 points or 1.4 percent to 25,520.24, the S&P 500 slumped 76.08 points or 1 percent to 7,457.69 and the Dow slid 406.55 points or 0.8 percent to 52,146.42.

For the week, the Nasdaq plunged by 2.9 percent, the S&P 500 dove by 1.6 percent and the Dow tumbled by 0.9 percent.

The early weakness on Wall Street came as technology stocks saw continued weakness after turning in some of the market's worst performances on Thursday.

A steep drop by shares of Netflix (NFLX) weighed on the tech sector, with the streaming giant plunging by 7.3 percent.

Netflix came under pressure after reporting second quarter results roughly in line with estimates but providing disappointing third quarter guidance.

Concerns about valuations also contributed to the weakness among tech stocks ahead of earnings news from Alphabet (GOOGL), IBM Corp. (IBM), Tesla (TSLA) and Intel (INTC) next week.

"With sentiment brittle, investors are becoming increasingly wary of valuations in the AI and technology sector - most notably in the memory chip space where share prices have surged to unprecedented levels this year. AJ Bell investment director Russ Mould.

However, the weakness spread to the broader markets as the day progressed amid a sharp increase by the price of crude oil. U.S. crude oil futures surged well above $80 a barrel amid concerns about the escalating conflict in the Middle East.

Tehran launched strikes against several countries across the Gulf and wider region after the U.S. launched a wave of strikes against Iran for the sixth night in a row over control of the Strait of Hormuz.

Airline stocks showed a substantial move to the downside amid the jump by the price of crude oil, resulting in a 3.5 percent nosedive by the NYSE Arca Airline Index.

Considerable weakness was also visible among brokerage stocks, as reflected by the 2.3 percent slump by the NYSE Arca Broker/Dealer Index.

Within the tech sector semiconductor stocks saw significant weakness, dragging the Philadelphia Semiconductor Index down by 1.6 percent to its lowest closing level in almost two months.

Housing, software and retail stocks also saw notable weakness, while oil producer and computer hardware stocks showed strong moves to the upside.

Commodity, Currency Markets

Crude oil futures are rising $0.21 to $82.70 a barrel after soaring $3.54 to $82.49 a barrel last Friday. Meanwhile, after climbing $26.70 to $4,018.80 an ounce in the previous session, gold futures are edging down $2.10 to $4,016.70 an ounce.

On the currency front, the U.S. dollar is trading at 162.40 yen versus the 162.39 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1420 compared to last Friday's $1.1439.

Asia

Asian stocks ended mixed in thin trading on Monday, with Japanese markets closed for Marine Day after the Nikkei 225 Index slumped 6.4 percent last week in a tech-led rout.

Another spike in crude oil prices and inflation concerns weighed on regional sentiment even as Chinese and Hong Kong markets rose after China's Moonshot AI released a new artificial intelligence model.

Gold held little changed above $4,000 an ounce in Asian trade as the dollar eased and risk currencies rebounded despite Fed rate hike fears.

Brent crude futures surged toward $90 a barrel, extending last week's rally as the United States carried out strikes against Iran for the ninth day in a row and Iran retaliated against U.S. assets across the Middle East, posing threats to shipping in the Strait of Hormuz.

China's Shanghai Composite Index climbed 0.9 percent to 3,796.28 after a state-backed "national team" of funds reportedly bought around $9 billion worth of stocks to support the market following a bruising sell-off on Friday.

Hong Kong's Hang Seng Index surged 2.4 percent to 25,143.05, with tech stocks like Alibaba and Baidu leading the charge.

Seoul stocks nosedived as investors continued to offload stocks linked to artificial intelligence. The Kospi Index plunged 4.5 percent to 6,516.27 due to concerns about China's AI advancements.

Tech heavyweights Samsung Electronics and SK Hynix both fell over 4 percent, while LS Electric lost 5.6 percent and Hyosung Heavy Industries plummeted 9 percent.

Australian markets gave up early gains to end marginally lower as technology stocks tumbled, offsetting gains in the energy sector amid Strait of Hormuz supply worries.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index finished marginally higher at 13,696.03 ahead of the release of second quarter inflation data on Tuesday.

Europe

European stocks are turning in a mixed performance on Monday as escalating Middle East tensions pushed Brent crude prices above $90 a barrel for the first time in a month, raising concerns about inflation, interest rates and economic growth.

Investors also looked ahead to earnings from major U.S. technology companies and an upcoming European Central Bank meeting, with the central bank widely expected to leave interest rates unchanged after hiking rates for the first time in nearly three years on June 11.

German bond yields hit a two-year high as official data showed German producer prices increased for the third straight month in June.

Producer prices grew at a pace of 1.8 percent on a yearly basis in June, slower than the 2.2 percent increase in May, Destatis reported.

This was the third consecutive rise in prices, primarily driven by higher prices of intermediate goods and energy prices.

On a monthly basis, producer prices dropped 0.3 percent compared to economists' forecast of 0.2 percent fall.

While the U.K.'s FTSE 100 Index is down by 0.3 percent, the German DAX Index is up by 0.2 percent and the French CAC 40 Index is up by 0.4 percent.

In corporate news, budget airline Ryanair has slumped after it reported a 34 percent drop in fiscal first-quarter profit, missing analyst estimates.

Self-storage operator Big Yellow Group has also moved to the downside after reporting a 3 percent rise in first-quarter revenue.

U.S. Economic News

The Conference Board is scheduled to release its report on leading economic indicators in the month of June at 10 am ET. The leading economic index is expected to come in unchanged in June after inching up by 0.1 percent in May.