FX.co ★ Bargain Hunting May Contribute To Initial Rebound On Wall Street

The U.S. stock market is projected to bounce back after last week's downturn. Investors may take advantage of the current situation to buy stocks at reduced prices. The Nasdaq and the S&P 500 have previously closed lower for six consecutive sessions, hitting their lowest levels in two months.

Further rebounds are challenged by shifting buying interest due to concerns regarding the future of interest rates. Investors may also be hesitant to make major moves pending several crucial U.S. economic reports, including new home sales, durable goods orders, and personal income and spending. The latter, report from the Commerce Department, contains inflation readings that the Federal Reserve takes into account.

Several important companies including Tesla, Boeing, IBM, Caterpillar, Honeywell, Alphabet, Intel, Microsoft, Chevron, and Exxon Mobil are slated to publish their quarterly results this week, marking the start of earnings season.

On the other hand, the Nasdaq experienced a significant drop during trading on Friday primarily due to the sharp decline in Netflix shares. Despite reporting better than expected first quarter results, Netflix's disappointing revenue guidance resulted in a steep drop of 9.1 percent in its share prices. Nvidia, a prominent name in the Artificial Intelligence market, also saw a 10% drop in its shares, significantly impacting the semiconductor sector.

Retail stocks also felt the pressure, pulling the Dow Jones U.S. Retail Index down by 1.5 percent. In contrast, the Dow Jones was positively impacted by a notable increase in American Express shares following better than expected first quarter results.

There was also an upward trend in banking stocks that drove the KBW Bank Index up by 2.9 percent, while the drop in treasury yields prompted utilities stocks to rise substantially. There was a surge in crude oil prices due to retaliatory actions by Israel against Iran although the increase did not last long.

Crude oil futures are currently declining after the recent surge, while gold futures are also seeing a significant reduction. In the currency market, the U.S. dollar is trading slightly higher against the yen and marginally lower against the euro.

Asian stocks rebounded as investors returned to riskier assets after Iran downplayed Israel's reported retaliatory attacks. The continued drop in oil prices due to growth concerns and rising inventory in the United States also eased investor apprehensions surrounding inflation and interest rates.The Shanghai Composite Index in China declined by 0.7 percent, closing at 3,044.60, due to the People's Bank of China maintaining its current 1-year and 5-year loan prime rates, and concerns over a price war affecting electric vehicle manufacturers.

In contrast, Hong Kong's Hang Seng Index saw a notable 1.8 percent rise to 16,511.69 after China's market regulator endorsed support for Hong Kong listings by major Chinese companies and proposed an expansion to the Stock Connect cross-border investment program. The China Securities Regulatory Commission remarked on the importance of enhancing Hong Kong's role as a key international financial center.

Japanese stocks observed substantial growth due to a further weakening of the yen before the Bank of Japan's forthcoming policy review. The Nikkei 225 Index increased by 1.0 percent to 37,438.61, having previously fallen 2.7 percent on Friday, marking its worst session in over a year. Despite chip-related stocks falling after a disappointing week for big technology stocks, the broader Topix Index saw a 1.4 percent increase to close at 2,662.46.

Shares in Seoul also rose, with the Kospi climbing 1.5 percent to 2,629.44, boosted by POSCO Holdings announcing measures to reduce costs during a downturn in the global steel and battery industries.

Australian markets saw promising advancements, largely driven by financial and mining stocks. The benchmark S&P ASX 200 Index rose 1.1 percent, reaching 7,649.20 before the release of key inflation data scheduled for Wednesday. Simultaneously, the All Ordinaries index gained 1.1 percent, closing at 7,902.

In New Zealand, the S&P NZX-50 Index saw a 0.5 percent increase, ending the day at 11,852.80.

European stocks mostly showed growth due to declining fears of a Middle East conflict, and falling oil prices alleviating concerns around inflation and interest rates. Investors showed boosted risk appetites after Iran and Israel executed actions that purposely avoided causalities.

Despite geopolitical tensions, investors focused on the impending release of U.S. economic data and tech earnings of this week. The U.K.'s FTSE 100 Index increased by 1.6 percent, the German DAX Index rose by 0.5 percent, and the French CAC 40 Index grew by 0.2 percent.

Different stocks in London performed strongly due to positive feedback from RBC Capital Markets, with Marks & Spencer up by 3.3 percent, Ocado by 5.5 percent, and Sainsbury by 3.8 percent. Meanwhile, Tesco rose by 2.8 percent after introducing the first segment of the £1 billion share buyback it announced in its results.

Tyman shares saw a significant 30 percent rise due to an agreement to be purchased by U.S. metal window and door manufacturer Quanex, in a cash and stock deal estimated to be worth £788m. Additionally, the Hipgnosis Songs Fund experienced a 9.7 percent growth as Blackstone proposed to purchase the troubled music rights investor for approximately $1.5 billion.

Today, no significant U.S. economic data is set to be released.