Stocks are likely to move to the downside in early trading on Thursday, extending the pullback seen over the past few sessions. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 futures down by 0.2 percent.
Profit taking may contribute to continued weakness on Wall Street after the Nasdaq and the S&P 500 reached their best levels in over a year last week.
Traders have been cashing on the recent strength amid concerns about the outlook for interest rates, with Federal Reserve Chair Jerome Powell predicting further rate hikes during congressional testimony on Wednesday.
Powell is due to testify before the Senate Banking Committee this morning and is likely to reiterate that the Fed will continue to raise rates in an effort to reduce inflation.
However, a report from the Labor Department showing initial jobless claims held at their highest level since October 2021 last week may help limit the downside, as the Fed has warned about the impact of labor market tightness.
The report said initial jobless claims came in at 264,000, unchanged from the previous week’s revised level. Economists had expected jobless claims to edge down to 260,000 from the 262,000 originally reported for the previous week.
Reflecting the upward revision to the previous week, jobless claims held at their highest level since hitting 269,000 in the week ended October 23, 2021.
Shortly after the start of trading, the National Association of Realtors is also due to release its report on existing home sales in the month of May. Existing home sales are expected to decrease by 0.6 percent in May after plunging by 3.4 percent in April.
The Conference Board is also scheduled to release its report on leading economic indicators in the month of May. The leading economic index is expected to fall by 0.7 percent in May after sliding by 0.6 percent in April.
After moving mostly lower over the two preceding sessions, stocks saw further downside during trading on Wednesday. The major averages all finished the day in negative territory, with the tech-heavy Nasdaq leading the slide.
The Nasdaq tumbled 165.10 or 1.2 percent to 13,502.20, continuing to give back ground after ending last Thursday’s trading at its best closing level in over a year. The S&P 500 also fell 23.02 points or 0.5 percent to 4,365.69, while the Dow dipped 102.35 points or 0.3 percent to 33,951.52.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday, with markets in China, Hong Kong and Taiwan closed for the Dragon Boat Festival. Japan’s Nikkei 225 Index slid by 0.9 percent, while South Korea’s Kospi rose by 0.4 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.’s FTSE 100 Index has slumped by 1.0 percent, the French CAC 40 Index is down by 0.9 percent and the German DAX Index is down by 0.5 percent.
In commodities trading, crude oil futures are tumbling $1.31 to $71.22 a barrel after jumping $1.34 to $72.53 a barrel on Wednesday. Meanwhile, after slipping $2.80 to $1,944.90 ounce in the previous session, gold futures are falling $.820 to $1,936.70 an ounce.
On the currency front, the U.S. dollar is trading at 141.91 yen versus the 141.88 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0988 compared to yesterday’s $1.0986.
Business News
Profit Taking May Lead To Extended Pullback On Wall Street
2023-06-22 12:48:27
