Stocks are likely to come under pressure in early trading on Thursday, extending the sharp pullback seen over the two previous sessions. The major index futures are currently pointing to a notably lower open for the markets, with the Dow futures down by 309 points.
The downward momentum on Wall Street comes as traders continue to digest the minutes of the Federal Reserve’s latest monetary policy meeting.
The minutes indicated that most Fed officials currently expect economic conditions to warrant scaling back the central bank’s asset purchase program before the end of the year.
The Fed restarted its asset purchase program back in March of 2020 and is currently purchasing bonds at a pace of $120 billion per month.
The asset purchase program has helped to prop up the markets throughout much of the coronavirus pandemic, with stocks reaching record highs even as the economy struggled.
While the tapering of asset purchases was to be expected as the economy recovers, traders still seem likely to use the news as an opportunity to cash in on the strength in the markets.
Potentially adding evidence to Fed officials’ view that the economy is close to the goal of maximum employment, the Labor Department released a report this morning showing initial jobless claims fell to a new pandemic-era low in the week ended August 14th.
The Labor Department said initial jobless claims fell to 348,000, a decrease of 29,000 from the previous week’s revised level or 377,000.
Economists had expected jobless claims to edge down to 363,000 from the 375,000 originally reported for the previous week.
Initial jobless claims decreased for the fourth consecutive week, falling to their lowest level since hitting 256,000 in the week ended March 14, 2020.
Shortly after the start of trading, the Conference Board is scheduled to release its report on leading economic indicators in the month of July. Economists expect the leading economic index to climb by 0.8 percent.
Stocks saw considerable volatility following the release of the minutes of the latest Federal Reserve meeting on Wednesday before moving sharply lower going into the close. With the late-day sell-off, the major averages extended the notable drop seen in the previous session.
The major averages finished the session just off their worst levels of the day. The Dow plunged 382.59 points or 1.1 percent to 34,960.69, the Nasdaq slumped 130.27 points or 0.9 percent to 14,525.91 and the S&P 500 tumbled 47.81 points or 1.1 percent to 4,400.27.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index slumped by 1.1 percent, while Hong Kong’s Hang Seng Index plunged by 2.1 percent.
The major European markets have also shown significant moves to the downside on the day. While the French CAC 40 Index has plummeted by 2.7 percent, the German DAX Index and the U.K.’s FTSE 100 Index are down by 1.9 percent and 1.8 percent, respectively.
In commodities trading, crude oil futures are tumbling $1.93 to $63.53 a barrel after slumping $1.13 to $65.46 a barrel on Wednesday. Meanwhile, after slipping $3.40 to $1,784.40 an ounce in the previous session, gold futures are rising $5.50 to $1,789.90 an ounce.
On the currency front, the U.S. dollar is trading at 109.69 yen versus the 109.77 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1698 compared to yesterday’s $1.1711.
Business News
Futures Pointing To Continued Weakness On Wall Street
2021-08-19 12:59:12
