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

After moving sharply higher over the two previous sessions, stocks may see some further upside in early trading on Thursday. The major index futures are currently pointing to initial strength on Wall Street, with the S&P 500 futures up by 0.2 percent.

Stocks may continue to benefit from optimism about what a second Donald Trump presidency will mean for the markets and the U.S. economy.

Overall trading activity is likely to be somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon.

With the Fed widely expected to lower rates by 25 basis points, traders are likely to pay close attention to the accompanying statement for clues about the outlook for future rate cuts.

Ahead of the announcement, CME Group’s FedWatch tool is indicating a 67.4 percent chance the Fed will cut rates by another 25 basis points in December but a 32.2 percent chance rates will be left unchanged.

On the U.S. economic front, a report released by the Labor Department showed a modest rebound by first-time claims for U.S. unemployment benefits in the week ended November 2nd.

The Labor Department said initial jobless claims crept up to 221,000, an increase of 3,000 from the previous week’s revised level of 218,000.

Economists had expected jobless claims to rise to 221,000 from the 216,000 originally reported for the previous week.

The uptick came a week after jobless claims dropped to their lowest level since hitting 216,000 in the week ended May 18th.

The Labor Department also released a separate report showing labor productivity surged by slightly less than expected in the third quarter, while unit labor costs jumped by much more than expected.

Stocks skyrocketed during trading on Wednesday, as traders celebrated Donald Trump’s victory in the presidential election. The major averages added to the strong gains posted during Tuesday’s session, reaching new record closing highs.

The major averages saw further upside in late-day trading, reaching new highs for the session. The Dow soared 1,508.05 points or 3.6 percent to 43,729.93, the Nasdaq surged 544.29 points or 3.0 percent to 18,983.47 and the S&P 500 shot up 146.28 points or 2.5 percent to 5,929.04.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.3 percent, while Hong Kong’s Hang Seng Index jumped by 2.0 percent and China’s Shanghai Composite Index surged by 2.6 percent.

Meanwhile, European stocks have moved mostly higher on the day. While the German DAX Index has shot up by 1.5 percent, the French CAC 40 Index is up by 0.6 percent and the U.K.’s FTSE 100 Index is just above the unchanged line.

In commodities trading, crude oil futures are slipping $0.22 to $71.47 a barrel after falling $0.30 to $71.69 a barrel on Wednesday. Meanwhile, after plummeting $73.40 to $2,676.30 an ounce in the previous session, gold futures are climbing $14.10 to $2,690.40 an ounce.

On the currency front, the U.S. dollar is trading at 153.63 yen versus the 154.63 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0784 compared to yesterday’s $1.0729.