Profit Taking May Contribute To Initial Pullback On Wall Street

(RTTNews) - Stocks may move to the downside in early trading on Monday, giving back ground following the upward move seen over the two previous sessions. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.3 percent.

Profit taking may contribute to initial weakness on Wall Street, as some traders look to cash in on the recent strength in the markets.

The advance seen to close out the previous week lifted the major averages to new record closing highs on Friday following the Federal Reserve's widely expected decision to lower interest rates by a quarter point.

The downward momentum on Wall Street also comes after the White House announced President Donald Trump has signed a proclamation to restrict the entry into the U.S. of certain H-1B aliens as nonimmigrant workers.

The White House said new H-1B applicants would be required to pay a $100,000 fee, with the move intended to "curb abuses that displace U.S. workers and undermine national security."

"Investors will be watching closely for any fall-out in the technology sector from the sharp rise in H1-B visa fees - affecting skilled foreign workers," said AJ Bell investment director Russ Mould.

"The news sparked some initial confusion around whether it would affect current visa holders and while this fear has been addressed and it has been confirmed as a one-time fee, it could still have a significant impact on tech firms," he added. "Many in the sector employ large numbers of people on these visas."

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of closely watched U.S. inflation readings as well as remarks by several Fed officials, including Fed Chair Jerome Powell.

Stocks moved mostly higher during trading on Friday, adding to the gains posted during Thursday's session. With the continued upward move, the major averages all reached new record closing highs.

The major averages reached new highs late in the session before giving back some ground going into the close. The Nasdaq advanced 160.75 points or 0.7 percent to 22,631.48, the S&P 500 climbed 32.40 points or 0.5 percent to 6,664.36 and the Dow rose 172.85 points or 0.4 percent to 46,315.27.

For the week, the tech-heavy Nasdaq surged by 2.2 percent, while the S&P 500 and the Dow jumped by 1.2 percent and 1.1 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index shot up by 1.0 percent, while Hong Kong's Hang Seng Index slid by 0.8 percent.

The major European markets have also turned mixed on the day. While the U.K.'s FTSE 100 Index is up by 0.2 percent, the French CAC 40 Index is down by 0.1 percent and the German DAX Index is down by 0.5 percent. In commodities trading, crude oil futures are falling $0.49 to $62.19 a barrel after slumping $0.89 to $62.68 a barrel last Friday. Meanwhile, after jumping $27.50 to $3,705.80 an ounce in the previous session, gold futures are surging $42.10 to $3,747.90 an ounce.

On the currency front, the U.S. dollar is trading at 147.83 yen versus the 147.95 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1783 compared to last Friday's $1.1746.