(RTTNews) – Stocks are likely to move to the downside in early trading on Monday, extending the pullback seen during last Friday’s session. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.4 percent.
The downward momentum on Wall Street comes amid concerns about a re-escalation of the military conflict in the Middle East following a period of relative calm.
Over the weekend, the U.S. and Iran traded strikes for the first time in over a month, contributing to a surge in crude oil prices.
U.S. crude oil futures are spiking by more than 3 percent after the U.S. attacked two Iranian rocket launchers on Larak Island and Iran retaliated by launching an attack on two U.S. bases in Jordan.
The sharp increase in crude oil prices may contribute to renewed worries about the outlook for inflation ahead of next month’s Federal Reserve meeting.
According to CME Group’s FedWatch Tool, the chances the central bank will raise interest rates by a quarter point have jumped to 63.9 percent following Fed Chairman Kevin Warsh’s hawkish remarks last Friday.
After seeing considerable volatility early in the session, stocks moved mostly lower over the course of the trading day on Friday. The major averages all moved to the downside on the day, partly offsetting the strength seen during Thursday’s session.
The Nasdaq slid 138.93 points or 0.5 percent to 26,402.42 and the S&P 500 fell 19.23 points or 0.3 percent to 7,711.76. The narrower Dow posted a more modest loss, edging down 9.45 points or less than a tenth of a percent to 53,559.99.
Despite the pullback on the day, the major averages all moved higher for the week. The Nasdaq advanced by 0.9 percent, while the Dow and the S&P 500 both climbed by 0.5 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan’s Nikkei 225 Index and Hong Kong’s Hang Seng Index both edged down by 0.1 percent, while China’s Shangia Composite Index increased by 0.9 percent.
The major European markets have also turned mixed on the day, with the U.K. markets closed for a bank holiday. While the German DAX Index is down by 0.7 percent, the French CAC 40 Index is up by 0.1 percent.
In commodities trading, crude oil futures are soaring $2.88 to $86.28 a barrel after slipping $0.13 to $83.40 a barrel last Friday. Meanwhile, after plunging $134.10 to $4,529.90 an ounce in the previous session, gold futures are falling $33 to $4,496.90 an ounce.
On the currency front, the U.S. dollar is trading at 159.82 yen versus the 160.04 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1593 compared to last Friday’s $1.1584.
