U.S. Stocks May See Initial Strength Amid Easing Middle East Tensions

(RTTNews) - Following the mixed performance seen during last Friday's session, stocks are likely to move mostly higher 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 0.8 percent.

Early buying interest is likely to be generated in reaction news that U.S. President Donald Trump has halted nearly two weeks of attacks on Iran to allow more room for diplomacy.

"He's giving talks some space, he's giving it a little bit of room," U.S. ambassador to the United Nations Mike Waltz told Fox News on Sunday.

Iran subsequently stopped conducting counterattacks and said it had made progress in talks with Oman on management of the Strait of Hormuz.

The news has led to a steep drop by the price of crude oil, with U.S. crude oil futures plunging by more than 6 percent.

Treasury yields have slumped along with the price of crude oil, easing concerns about the outlook for interest rates ahead of the Federal Reserve's monetary policy meeting this week.

"Sentiment has received a further boost from a sizzling stock market debut in China by silicon chip maker CXMT," said AJ Bell investment director Russ Mould.

He added, "Its near five-fold surge may help to soothe concerns about the AI trade after slumps in SpaceX and Korea's SK Hynix after their recent offerings."

In U.S. economic news, the Commerce Department released a report showing new orders for U.S. manufactured durable goods rebounded by much less than expected in the month of June.

The Commerce Department said durable goods orders rose by 0.3 percent in June after tumbling by a revised 4.0 percent in May.

Economists had expected durable goods orders to jump by 1.7 percent compared to the 4.5 percent plunge originally reported for the previous month.

Excluding a modest decrease in orders for transportation equipment, durable goods orders climbed by 0.6 percent in June after surging by 1.8 percent in May. Ex-transportation orders were expected to increase by 0.9 percent.

Following the sell-off seen during Thursday's session, stocks saw considerable volatility over the course of the trading session on Friday. The major averages showed a notable move to the upside in morning trading before coming under considerable pressure in the afternoon.

The major averages eventually ended the day mixed. While the Nasdaq slid 161.87 points or 0.6 percent to 24,975.82, the S&P 500 inched up 3.68 points or 0.1 percent to 7,411.98 and the Dow climbed 235.60 points or 0.5 percent to 51,947.25.

The tech-heavy Nasdaq tumbled by 2.1 percent for the week, closing below 25,000 for the first time since late April. The S&P 500 and Dow posted more modest weekly losses, falling by 0.6 percent and 0.4 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index rose by 0.5 percent, while China's Shanghai Composite Index jumped by 1.2 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index is up by 1.6 percent, the French CAC 40 Index is up by 0.8 percent and the U.K.'s FTSE 100 Index is up by 0.5 percent.

In commodities trading, crude oil futures are plunging $5.35 to $83.96 a barrel after tumbling $2.88 to $89.31 a barrel last Friday. Meanwhile, after climbing $20.60 to $4,070.80 an ounce in the previous session, gold futures are rising $18.20 to $4,089 an ounce.

On the currency front, the U.S. dollar is trading at 163.68 yen versus the 163.84 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1380 compared to last Friday's $1.1385.