US open: Stocks pick up from monthly low, USD eases off two month high

Stocks look set to rebound after heavy losses in the previous week after a surprise hawkish shift from the Fed. Fed speaker Williams will be in focus amid a quiet economic calendar.

USA (2)

US futures

Dow futures +0.5% at 33476

S&P futures +0.3% at 4179

Nasdaq futures +0.1% at 14070

In Europe

FTSE +0.3% at 7030

Dax +0.8% at 15555

Euro Stoxx +0.5% at 4104

Learn more about trading indices

Dow to outperform after 3.5% decline last week

US stocks are set to rebound on Monday after a hefty week of losses last with. With all three major indices on Wall Street heading higher, the Fed inspired sell off looks like it was overdone.

The Fed’s sudden hawkish shift last week, with two interest rate hikes now expected in 2023 caught the market off guard.

The Dow was the hardest hit last week by a significant margin, and that is the index which is rebound the most today.

Inflation and the Fed’s next moves will remain very much in focus again this week with Fed Chair Jerome Powell due to appear before Congress tomorrow and with PCE data on Friday.

Today the economic calendar is very light. Attention will be firmly on Fed Williams who is due to speak later.


Amazon is likely to be under the spotlight on Amazon Prime Day. The two-day sales event generated $10.4 billion in sales for the e-commerce giant last year.

Where next for the Dow Jones?

The Dow broke through its ascending trend line support dating back to 2020’s mid-March lows for the first time last week. The Dow futures extended the sell off this morning briefly falling below the 100 dma at 33200 to a low of 33030. The price has since picked up retaking the 100 DMA, taking the RSI out of oversold territory. Any meaningful recovery would need to break above 33750, a level which offered support in the second half of April. A move above 34150 the ascending trendline and the 50 dma could see the buyers target a fresh all-time high. On the downside a close below the 100 dma and today’s low of 33030 could suggest more losses are coming, with sellers target 32000.

FX – USD eases, GBP rebounds ahead of Thursday’s BoE rate decision

The US Dollar is trading lower, but held on to the majority of gains following last week’s hawkish surprise from the Fed. The US Dollar index surged 1.9% last week its biggest weekly gain since March 2020.

GBP/USD is rebounding firmly, outperforming its major peers as investors look ahead to the BoE rate decision later in the week. Whilst some of cable’s gains are owing to the weaker US Dollar, part of the gains are also attributed to a more hawkish tilt from the BoE on Thursday, particularly in light of inflation running above the 2% target.

GBP/USD  +0.6% at 1.3885

EUR/USD  +0.2% at 1.1887

Oil hovers around multi-year highs awaiting next catalyst

Oil prices are treading water at the start of the week after booking yet another week of gains last week. Both oil benchmarks booked the fourth straight week of gains last week. Optimism surrounding higher demand as economies reopen and a strong driving season keep oil bulls optimistic.

Meanwhile, concerns over Iranian oil flooding back into the market have eased further following the Presidential elections in Iran. The election of a hardline judge Ebrahim Raisi, who is already under US sanctions could put the brakes on any nuclear deal being agreed.

Trading is relatively quiet, the oil markets appear to be awaiting the next catalyst.

US crude trades +0.06% at $71.39

Brent trades -0.07% at $72.91

Learn more about trading oil here.

The complete guide to trading oil markets

Looking ahead

15:00 ECB Lagarde to speak

22:00 Fed’s Williams to speak

How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

Build your confidence risk free

More from Indices

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.