U.S. Stocks May See Initial Strength On Williams' Dovish Comments

(RTTNews) - Following the substantial downturn seen over the course of the previous session, stocks may move back to the upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.5 percent.

Traders may once again look to pick up stocks at reduced levels following the sharp pullback seen on Thursday, which extended a recent downward trend for the markets.

With yesterday's slump, the Nasdaq and the S&P 500 tumbled their lowest closing levels in over two months and the Dow fell to a new one-month low.

Buying interest may also be generated in reaction to remarks by New York Federal Reserve President John Williams that have helped renew optimism about the outlook for interest rates.

During remarks at the Central Bank of Chile Centennial Conference, Williams described monetary policy as being "modestly restrictive" and said he sees "room for a further adjustment" to rates in the near term.

Seemingly in response to Williams' remarks, CME Group's FedWatch Tool indicates the chances of a quarter point rate cut at the Fed's December meeting have soared to 70.9 percent from just 39.1 percent on Thursday.

However, it is worth noting that the minutes of the latest Fed meeting revealed officials have "strongly differing views" about whether to continue cutting rates in December.

Not long after the start of trading, the University of Michigan is due to release its revised reading on consumer sentiment in the month of November.

The consumer sentiment index for November is expected to be upwardly revised to 50.5 from a preliminary reading of 50.3, which was down from 53.6 in October.

After moving sharply higher early in the session, stocks showed a substantial downturn over the course of the trading day on Thursday. The major averages pulled back well off their early highs and tumbled firmly into negative territory.

The major averages ended the day just off their lows of the session. The Nasdaq plummeted 486.18 points or 2.2 percent to 22,078.05, the S&P 500 plunged 103.40 points or 1.6 percent to 6,538.76 and the Dow slumped 386.51 points or 0.8 percent to 45,752.26.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both tumbled by 2.4 percent, while South Korea's Kospi nosedived by 3.8 percent.

Most European stocks have also moved to the downside on the day. While the German DAX Index is down by 0.4 percent, the U.K.'s FTSE 100 Index is down by 0.1 percent and the French CAC 40 Index is just below the unchanged line.

In commodities trading, crude oil futures are slumping $0.56 to $58.44 a barrel after falling $0.25 to $59 a barrel on Thursday. Meanwhile, after inching up $6.90 to $4,066.90 ounce in the previous session, gold futures are sliding $22.80 to $4,060 an ounce.

On the currency front, the U.S. dollar is trading at 156.84 yen versus the 157.46 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1520 compared to yesterday's $1.1527.