U.S. Stocks May Move To The Upside In Early Trading

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Monday, with stocks poised to add to the gains posted last week.

The upward momentum on Wall Street comes amid an advance by shares of Nvidia (NVDA), as the AI darling and market leader is jumping by 2.2 percent in pre-market trading.

Nvidia is advancing after software giant Microsoft (MSFT) revealed it has secured export licenses from the Trump administration to ship Nvidia chips to the United Arab Emirates.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of payroll processor ADP's report on private sector employment on Wednesday.

With the ongoing government shutdown indefinitely delaying several key U.S. economic reports, the ADP report could shed light on the strength of the labor market amid uncertainty about the outlook for interest rates.

After showing a strong move to the upside early in the session, stocks saw considerable volatility over the course of the trading day on Friday.

The major averages pulled back off their early highs in mid-day trading before moving back to the upside only to once again give back ground going into the end the session.

Despite the late-day pullback, the major averages all ended the day in positive territory. The Nasdaq climbed 143.81 points or 0.6 percent to 23,724.96, the S&P 500 rose 17.86 points or 0.3 percent to 6,840.20 and the Dow inched up 40.75 points or 0.1 percent to 47,562.87.

For the week, the tech-heavy Nasdaq surged by 2.2 percent, while the Dow and the S&P 500 advanced by 0.8 percent and 0.7 percent, respectively.

The early strength on Wall Street largely reflected a positive reaction to earnings news from Amazon (AMZN), with the online retail giant soaring by 9.6 percent on the day.

Amazon reached a new record closing high after reporting better than expected third quarter results amid a sharp increase in cloud computing revenue.

"The e-commerce division may have by far the bigger public profile but it's the cloud services AWS division which is the real engine of Amazon's growth and, it's this which sparked the share price into life," said AJ Bell investment director Russ Mould.

He added, "Demand for computing power linked to AI is showing no signs of letting up and that is driving significant growth for AWS, with third-quarter numbers helping to ease fears that this business was losing ground to rival operators."

Netflix (NFLX) also turned in a strong performance on the day after the streaming giant announced its board of directors has approved a ten-for-one stock split.

On the other hand, iPhone maker Apple (AAPL) moved to the downside despite reporting fiscal fourth quarter results that exceeded analyst estimates and providing upbeat guidance for the current quarter.

Uncertainty about the outlook for interest rates also contributed to the volatility on Wall Street following Federal Reserve Jerome Powell's remarks earlier in the week.

While the Fed lowered interest rates by another quarter point as widely expected on Wednesday, Powell's post-meeting remarks partly offset optimism about another rate cut in December.

Powell said a further reduction in rates in December is "not a foregone conclusion," noting Fed officials had "strongly differing views about how to proceed" at the final meeting of the year.

Retail stocks turned in a strong performance amid the surge by Amazon, with the Dow Jones U.S. Retail Index spiking by 4.0 percent to its best closing level in over a month.

Significant strength was also visible among airline stocks, as reflected by the 2.7 percent surge by the NYSE Arca Airline Index. The index bounced off its lowest closing level in well over two months.

Biotechnology, computer hardware and brokerage stocks also saw considerable strength on the day, while gold stocks moved notably lower amid a decrease by the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are inching up $0.03 to $61.01 a barrel after climbing $0.41 to $60.98 barrel last Friday. Meanwhile, after falling $19.40 to $3,996.50 an ounce in the previous session, gold futures are jumping $30.70 to $4,027.40 an ounce.

On the currency front, the U.S. dollar is trading at 154.25 yen versus the 154.00 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1510 compared to last Friday's $1.1534.

Asia

Asian stocks ended higher in thin trading on Monday, with Japanese markets closed for a public holiday.

Investors monitored the latest trade developments after the White House released details of a new trade and economic agreement reached between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea.

According to the fact sheet, Beijing agreed to suspend new export controls on rare earth metals and end investigations into U.S. firms in the semiconductor supply chain.

China's Shanghai Composite Index rose 0.6 percent to 3,976.52 despite disappointing PMI data, with a private gauge of Chinese manufacturing activity dropping to 50.6 in October from 51.2 in September.

Hong Kong's Hang Seng Index jumped 1.0 percent to 26,158.36 after the banking sector's third quarter earnings indicated a stabilization trend.

Seoul stocks soared to a record high, led by sharp gains in big-cap chip and defense shares following the Asia-Pacific Economic Cooperation gathering last week. The Kospi surged 2.8 percent to 4,221.87, breaching the 4,200 mark for the first time in history.

Shares of Samsung Electronics, the country's biggest company, shot up 3.4 percent and its chipmaking rival SK Hynix spiked 10.9 percent following Nvidia's announcement on Friday of plans to supply up to 260,000 units of artificial intelligence chips to South Korea.

Australian markets ended modestly higher as the Reserve Bank of Australia kicked off its two-day policy meeting amid rising economic complexities.

The benchmark S&P/ASX 200 Index edged up by 0.2 percent to 8,894.80, while the broader All Ordinaries Index settled little changed with a positive bias at 9,182.50. Lender Westpac rallied 2.8 percent despite reporting a drop in annual profit.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index finished marginally higher at 13,556.30, marking its seventh consecutive gain and closing near a three-week high after a choppy session.

Europe

European stocks have moved mostly higher during trading on Monday, regaining ground after trending lower over the past few sessions.

The pan-European Stoxx 600 Index is up by 0.3 percent after ending half a percent lower on Friday, marking its fourth straight losing session.

The German DAX Index is also up by 0.8 percent, although the U.K.'s FTSE 100 Index is just below the unchanged line and the French CAC 40 Index is down by 0.1 percent.

Eurozone manufacturing sector stagnated as initially estimated in October, following a fractional deterioration in September, the purchasing managers' survey compiled by S&P Global showed on Monday.

The final Purchasing Managers' Index posted 50.0 in October, signaling no change in the operating conditions in the manufacturing sector. The score matched the initial estimate and remained above September's score of 49.8.

British oil major BP Plc has moved to the upside after it agreed to divest stakes in U.S. shale assets to Sixth Street for $1.5 billion.

Renault has also jumped. The French automaker said it would sell a 26.4 percent stake in its Brazilian business, Renault do Brasil, to Chinese automaker Geely Automobile.

Meanwhile, Ryanair Holdings has moved sharply lower. After reporting a 42 percent increase in first-half profit, the airline has warned of fare pressures and external risks.

U.S. Economic News

The Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of October at 10 am ET. The ISM's manufacturing PMI is expected to inch up to 49.5 in October from 49.1 in September, but a reading below 50 would still indicate contraction.

At 12 pm ET, San Francisco Federal Reserve President Mary Daly is due to participate in a moderated conversation before an event hosted by the Forum Club of the Palm Beaches.

Federal Reserve Governor Lisa Cook is scheduled to speak on "The Outlook for the Economy and Monetary Policy" at the Brookings Institution at 2 pm ET.