U.S. Stocks May See Further Downside In Early Trading

Stocks are likely to move to the downside in early trading on Thursday, extending the sharp pullback seen in the previous session. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.4 percent.

Concerns about the outlook for interest rates may weigh on Wall Street following the release of a slew of U.S. economic data, including a Commerce Department report showing GDP soared by more than expected in the third quarter of 2023.

The Commerce Department said GDP spiked by 4.9 percent in the third quarter after jumping by 2.1 percent in the second quarter. Economists had expected GDP to surge by 4.2 percent.

The stronger than expected GDP reflected increases in consumer spending, private inventory investment, exports, state and local government spending, federal government spending, and residential fixed investment.

The Commerce Department also released a report on Thursday showing new orders for U.S. manufactured durable goods spiked by much more than expected in the month of September.

The report said durable goods orders soared by 4.7 percent in September following a revised 0.1 percent dip in August.

Economists had expected durable goods orders to jump by 1.5 percent compared to the 0.1 percent uptick that had been reported for the previous month.

Excluding orders for transportation equipment, durable goods orders climbed by 0.5 percent in September, matching the increase in August. Ex-transportation orders were expected to rise by 0.2 percent.

Meanwhile, the Labor Department released a report showing first-time claims for U.S. unemployment benefits edged higher in the week ended October 21st.

The report said initial jobless claims rose to 210,000, an increase of 10,000 from the previous week’s revised level of 200,000. Economists had expected jobless claims to rise to 208,000 from the 198,000 originally reported for the previous week.

A negative reaction to quarterly results from Meta Platforms (META) may also weigh on Wall Street, with the Facebook parent slumping by 4.1 percent in premarket trading even though the company reported third quarter results that exceeded analyst estimates on the top and bottom lines.

Not long after the start of trading, the National Association of Realtor is due to release its report on pending home sales in the month of September. Pending home sales are expected to decline by 1.5 percent in September after plunging by 7.1 percent in August.

Stocks managed to finish Tuesday’s session mostly higher but showed a substantial move back to the downside during trading on Wednesday. The tech-heavy Nasdaq led the pullback, plunging to a five-month closing low.

The Nasdaq tumbled 318.65 points or 2.4 percent to 12,821.22, reflecting its worst day since February. The S&P 500 also slumped 60.91 points or 1.4 percent to 4,186.77, its lowest closing level in almost five months, while the narrower Dow fell 105.45 points or 0.3 percent to 33,035.93.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index dove by 2.1 percent, while South Korea’s Kospi plummeted by 2.7 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has tumbled by 1.3 percent, the U.K.’s FTSE 100 Index is down by 0.7 percent and the French CAC 40 Index is down by 0.6 percent.

In commodities trading, crude oil futures are plunging $2.49 to $92.90 a barrel after jumping $1.65 to $85.39 a barrel on Wednesday. Meanwhile, after climbing $8.80 to $1,994.90 an ounce in the previous session, gold futures are edging down $1.30 to $1,993.60 an ounce.

On the currency front, the U.S. dollar is trading at 150.26 yen versus the 150.23 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0545 compared to yesterday’s $1.0566.