The US markets rose on Monday as the Wall Street tried to recover from the steep losses suffered last week. This came on the back of data indicating a significant slowdown in the labor market.
The three major averages kicked off Monday's session in green. While the Dow Jones Industrial Average was trading 266.89 points higher, the S&P 500 and Nasdaq Composite both gained 0.85% and 1%, respectively.
The US stock index futures had indicated a positive start on Monday, with Nasdaq 100 futures up 0.7% and S&P 500 futures rising 0.6%. The Dow Jones Industrial Average futures also rose 255 points.
The stocks rebounded as buyers scooped stocks at bargain after the selloff last week. “We’re seeing mostly technical dip-buying,” said Tom Essaye at The Sevens Report told Bloomberg.
“Economic growth is undoubtedly and clearly losing momentum, but a soft landing remains more likely than a hard landing. This week focus turns back to inflation,” Essaye added.
The US markets suffered serious losses in the first week of September, a historically tough month for the markets. While the S&P 500 registered its worst week since March 2023 with a 4.3% dip, Nasdaq Composite saw its worst weekly performance since 2022 with a 5.8% drop. The 30-stock Down Jones also fell 2.9%.
The fall came after the US economy saw a modest increase of 1,42,000 new jobs in August, highlighting a significant slowdown in the labor market and reinforcing expectations that the Federal Reserve may lower interest rates later this month. Economists polled by Dow Jones expected a gain of 1,61,000.
The traders will now be looking to this week’s inflation data for clues on the size of Federal Reserve rate cuts.
US 10-year yields advanced two basis points on Monday morning at 3.73%.
Brent climbed towards $72 per barrel on Monday after losing close to 10% last week. The plunge in oil was primarily due to slowdowns in the US and China, endangering demand at a time of abundant supply.
(With Inputs From Bloomberg)
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