The major U.S. index futures are currently pointing to a roughly flat open on Monday, with stocks likely to show a lack of direction following the volatility seen in the previous session.
Traders may be reluctant to make significant moves amid uncertainty about the near-term outlook for the markets and interest rates.
Following the strong upward move seen on Thursday, stocks gave back some ground during Friday’s session. The major averages all moved to the downside, with the Dow and the S&P 500 pulling back off their best closing levels in almost two months.
The major averages regained ground late in the session but remained in negative territory. The Dow slid 143.22 points or 0.4 percent to 33,886.47, the Nasdaq fell 42.81 points or 0.4 percent to 12,123.47 and the S&P 500 dipped 8.58 points or 0.2 percent to 4,137.64, RTTNews cited.
Despite the pullback on the day, the major averages all moved higher of the week. The Dow jumped by 1.2 percent, the S&P 500 advanced by 0.8 percent and the Nasdaq rose by 0.3 percent.
The weakness that emerged on Wall Street coincided with the release of a report from the University of Michigan showing a jump in year-ahead inflation expectations in the month of April.
The preliminary report said one-year inflation expectations jumped to 4.6 percent in April from 3.6 percent in March.
“These expectations have been seesawing for four consecutive months, alternating between increases and decreases,” said Surveys of Consumers Director Joanne Hsu.
She added, “Uncertainty over short-run inflation expectations continues to be notably elevated, indicating that the recent volatility in expected year-ahead inflation is likely to continue.”
At the same time, five-year inflation expectations held at 2.9 percent for fifth straight month and have stayed within the narrow 2.9 to 3.1 percent range for 20 of the last 21 months.
Traders are also digesting a slew of other U.S. economic data, including a report from the Commerce Department showing retail sales fell by much more than expected in the month of March.
The Commerce Department said retail sales slumped by 1.0 percent in March after dipping by a revised 0.2 percent in February.
Economists had expected retail sales to decline by 0.4 percent, matching the decrease originally reported for the previous month.
Excluding a steep drop in sales by motor vehicle and parts dealers, retail sales still slid by 0.8 percent in March after coming in unchanged in February. Ex-auto sales were expected to dip by 0.3 percent.
A separate report from the Federal Reserve showed U.S. industrial production increased by more than expected in March, although the increase was largely due to a spike in utilities output.
Gold stocks showed a significant move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 2.1 percent. The index ended the previous session at its best closing level in eleven months. The pullback by gold stocks came amid a steep drop by the price of the precious metal.
Interest rate-sensitive commercial real estate and utilities stocks also saw considerable weakness on the day, with the Dow Jones U.S. Real Estate Index and the Dow Jones Utility Average falling by 1.6 percent and 1.3 percent, respectively.
Airline, telecom and tobacco stocks also saw notable weakness on the day, while some strength was visible among banking stocks.
Financial giant JPMorgan Chase (JPM) posted a standout gain after reporting record quarterly revenue that exceeded analyst estimates.
