U.S. Stocks May Give Back Ground In Early Trading

(RTTNews) - The major U.S. index futures are currently pointing to a lower open on Monday, with stocks likely to give back ground after moving higher over the two previous sessions.

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.

The continued strength on Wall Street partly reflected an extension of recent upward momentum, which has helped to propel the major averages to new record highs.

While September is typically the worst month for stocks, the major averages have trended higher over the first few weeks of the month.

Optimism about lower interest rates has contributed to the strength on Wall Street, with the Federal Reserve cutting rates by a quarter point on Wednesday and signaling two more rate cuts this year.

Stocks saw further upside following President Donald Trump's comments about a call with his Chinese counterpart Xi Jinping, which he described as "very productive."

Trump said progress was made on many very important issues, including trade, fentanyl, the need to end the war between Russia and Ukraine and the approval of a deal over TikTok's U.S. operations.

Overall trading activity appeared somewhat subdued, however, as a lack of major U.S. economic data kept some traders on the sidelines.

Gold stocks moved sharply higher amid an increase by the price of the precious metal, resulting in a 4.3 percent surge by the NYSE Arca Gold Bugs Index.

Significant strength also emerged among software stocks, as reflected by the 1.8 percent gain posted by the Dow Jones U.S. Software Index.

On the other hand, energy stocks showed a notable move to the downside amid an extended pullback by the price of crude oil.

Reflecting the weakness in the sector, the Philadelphia Oil Service Index slumped by 2.1 percent and the NYSE Arca Oil Index slid by 1.5 percent.

Housing stocks also saw considerable weakness on the day, dragging the Philadelphia Housing Sector Index down by 1.2 percent.

Commodity, Currency Markets

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.

Asia

Asian stocks turned in a mixed performance on Monday as investors wondered how U.S. President Donald Trump's crackdown on immigration would reshape the world's largest economy in the short and long term.

Traders also pondered the U.S. monetary policy path after the U.S. Federal Reserve delivered its widely expected 25-basis point rate cut last week and projected it would do so twice more this year amid a cooling labor market.

China's Shanghai Composite Index edged up by 0.2 percent to 3,828.58 as a group of senior U.S. House representatives arrived in China on Sunday for talks with President Xi Jinping's government.

Hong Kong's Hang Seng Index slid 0.8 percent to 26,344.14. BYD Co. shares fell 2.3 percent after reports suggested that Warren Buffett's investment firm has offloaded its entire stake in the Chinese electric-vehicle maker.

Japanese markets rebounded after falling on Friday following the Bank of Japan's announcement of sale of exchange-traded funds.

The Nikkei 225 Index jumped 1.0 percent to 45,493.66, while the broader Topix Index settled 0.5 percent higher at 3,163.17.

Chip-related shares logged big gains, with Advantest and Tokyo Electron climbing 3.2 percent and 3.9 percent, respectively.

Seoul stocks rose notably to set a new record high, with tech shares leading the surge. The Kospi climbed 0.7 percent to 3,468.65. Samsung Electronics surged 4.8 percent after it secured approval from Nvidia Corp. for its high-bandwidth memory chips.

Australian markets ended higher, led by mining and gold stocks. The benchmark S&P/ASX 200 Index rose 0.4 percent to 8,810.90 after the Reserve Bank of Australia told a parliamentary hearing that the economy is now back in a cyclical "upturn." The broader All Ordinaries Index closed up 0.5 percent at 9,102.10.

Across the Tasman, New Zealand's benchmark S&P/NX-50 Index fell 0.7 percent to 13,141.54, giving back gains from the previous session.

Europe

European stocks are turning in a mixed performance on Monday as investors await key U.S. inflation readings as well as comments from several Federal Reserve officials this week for additional clues on the Fed's rate trajectory. Interest rate decisions in Switzerland and Sweden are also due later this week.

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.

German automaker Volkswagen has slumped after adjusting its 2025 forecast. Similarly, Porsche AG has plummeted after dialing back plans for its electric vehicle rollout due to weaker demand.

Dutch surveyor Fugro has also plunged after withdrawing its financial guidance for 2025 following "significant changes" in market conditions in recent weeks.

Meanwhile, Centrica is moving higher in London after announcing the commencement of the second and final tranche of its share buyback program.

Precious metal miner Fresnillo has jumped as gold surged to set a fresh record high above $3,700 per ounce, buoyed by investors' heightened expectations of a dovish rate cut path.

U.S. Economic News

New York Federal Reserve President John Williams is due to participate virtually in a panel before a "Monetary Policy Frameworks: Recent Developments and Outlook An International Comparative View" event at 9:45 am ET.

At 10 am ET, St. Louis Federal Reserve President Alberto Musalem is scheduled to speak on the U.S. economy and monetary policy in a moderated conversation at the Brookings Institution.

Federal Reserve Governor Stephen Miran is due to speak on "Non-Monetary Forces and Appropriate Monetary Policy" before an Economic Club of New York luncheon at 12 pm ET.

Also at 12 pm ET, Cleveland Federal Reserve President Beth Hammack is scheduled to speak on "The Fed's Role in the Economy and Impact on Everyday Life" before a "Fed Talk" event.

Richmond Federal Reserve President Thomas Barkin is also due to speak virtually on the economy before the Howard County Chamber of Commerce.