· The S&P 500 ended the day down slightly on Friday but less than 1% below its all-time high as a drop in Apple stock countered cooling U.S.-China trade tensions.
The Dow Jones Industrial Average .DJI rose 37.07 points, or 0.14%, to 27,219.52, the S&P 500 .SPX lost 2.18 points, or 0.07%, to 3,007.39 and the Nasdaq Composite .IXIC dropped 17.75 points, or 0.22%, to 8,176.71.
Market participants now look to the U.S. Federal Reserve, which is widely expected to cut interest rates by 25 basis points at the conclusion of its monetary policy meeting next week.
· U.S. stock futures dropped on Sunday night amid fears that a surge in oil prices following an attack in Saudi Arabia could slow down global economic growth.
Dow Jones Industrial Average futures were down 108 points, indicating a loss of 112 points at Monday’s open. S&P 500 and Nasdaq 100 futures were also down. This would be the first decline in 9 days for the Dow, which had climbed back to within 1% from a record on Friday.
A decline on Monday would snap an eight-day winning streak for the Dow
· European stocks edged higher on Friday afternoon after the European Central Bank (ECB) delivered an aggressive stimulus package in a bid to reinvigorate the ailing euro zone economy.
The pan-European Stoxx 600 closed 0.4% higher, banks and basic resources emerging as the best performing sectors with roughly 2.8% in gains while food and beverage stocks dropped 1.9%.
· Stocks in Asia Pacific were subdued in Monday morning trade as oil prices surged following drone attacks over the weekend that hit major oil production facilities in Saudi Arabia.
Australia’s S&P/ASX 200 slipped 0.16% in early trade as majority of the sectors traded lower with the exception of the energy subindex, which soared more than 5% on the back of a surge in oil prices.
Over in South Korea, the Kospi traded largely flat as shares of chipmaker SK Hynix plunged 3.75%.
Overall, the MSCI Asia ex-Japan index traded largely unchanged.
· Markets in Japan are closed on Monday for a holiday.
· China industrial production data for August, expected to be released at 10:00 a.m. HK/SIN, will be watched for clues of the impact of the ongoing trade war between Beijing and Washington. Industrial output growth saw an expected drop to a more than 17-year low in July.
· With U.S.-China trade tensions roiling markets, investors are counting on support for stocks coming from a Federal Reserve willing to keep cutting interest rates to help the U.S. economy avoid a severe downturn.
But traders will closely watch how the markets open on Monday after attacks over the weekend on Saudi Arabian oil facilities, given the geopolitical sensitivities have the potential to steal some attention from the Fed.
A quarter-point rate reduction is widely expected when the Fed issues its next policy statement on Wednesday, which would be the central bank’s second such cut after lowering rates in July for the first time since 2008. That puts the greater focus on clues about how much further the Fed will go.
Reference: CNBC, Reuters
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