Profit Taking May Contribute To Initial Pullback On Wall Street

The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to give back ground after turning in a strong performance in recent sessions.

Traders may look to cash in on recent strength in the markets, which has seen stocks largely offset the sell-off seen earlier this month.

The S&P 500 reached a new record intraday high on Wednesday before giving back some ground, while the Nasdaq is also back within striking distance of its record highs.

Lingering concerns about the impact of President Donald Trump’s proposed tariff policies may also weigh on Wall Street.

Trump is scheduled to deliver the keynote address before the World Economic Forum in Davos, Switzerland, later this morning.

U.S. stocks closed on a firm note on Wednesday as investors reacted positively to some upbeat earnings updates and corporate news and on continued optimism about a few interest rate cuts by the Federal Reserve this year.

Worries about tariff threats lingered but investors largely shrugged off concerns and kept picking up stocks.

The major averages all closed on a strong note, with the tech-heavy Nasdaq recording a more pronounced gain thanks to buoyant earnings and sales guidance by Netflix and Trump’s AI initiative.

The Dow closed up 130.92 points or 0.3 percent, at 44,156.73. The S&P 500 gained 37.13 points or 0.6 percent, settling at 6,086.37, while the Nasdaq jumped 252.56 points or 1.3 percent, to 20,009.34.

Trump’s announcement of a $500 billion private-sector AI infrastructure investment plan from a venture involving Oracle, Open AI and Softbank set the stage for tech stocks’ strong performance.

Oracle shares surged nearly 7 percent, NVIDIA climbed about 4.2 percent, Microsoft gained nearly 4 percent and Meta Platforms closed up by about 2.7 percent.

Netflix soared nearly 10 percent after the company reported an addition of 19 million subscribers in the fourth quarter, the biggest ever subscriber gains in any quarter. Netflix’s bottom line came in at $1.869 billion or $4.27 per share in the fourth quarter, compared with $938 million or $2.11 per share last year.

Among other prominent gainers in the session, Amazon, Eli Lilly, Procter & Gamble, Salesforce, Cisco Systems, American Express, Analog Devices and Nike advanced 1 to 2 percent.

Pfizer, Booking Holdings, Morgan Stanley, Merck, Chevron Corporation, Bank of America, Johnson & Johnson, Tesla and Exxon Mobil Corporation closed notably lower.

Commodity, Currency Markets

Crude oil futures are inching up $0.05 to $75.49 a barrel after falling $0.39 to $75.44 a barrel on Wednesday. Meanwhile, after climbing $11.70 to $2,770.90 an ounce in the previous session, gold futures are tumbling $26.60 to $2,744.30 an ounce.

On the currency front, the U.S. dollar is trading at 156.20 yen versus the 156.53 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0405 compared to yesterday’s $1.0409.

Asia

Asian stocks turned in a mixed performance on Thursday despite China announcing a slew of measures to stabilize its stock markets.

Traders awaited key announcements on tariffs from the Trump administration and policy decisions from several major central banks in the coming weeks.

The dollar retreated in Asian trading and gold held steady near a three-month high, while oil prices fell on signs of rising stockpiles in the U.S.

China’s Shanghai Composite Index rose 0.5 percent to 3,230.16 as Beijing said it would guide big state insurers and commercial insurance funds to increase investments in the A-share market.

In addition, the securities regulator pledged to step up efforts to propel cross-border investment and financing.

Hong Kong’s Hang Seng Index ended 0.4 percent lower at 19,700.56, giving up early gains.

Japanese markets rose notably amid optimism over artificial intelligence spending and ahead of the CPI data and the BoJ rate decision due Friday.

The Nikkei 225 Index climbed 0.8 percent to 39,958.87, while the broader Topix Index settled 0.5 percent higher at 2,751.74.

SoftBank Group surged 5.1 percent to extend gains from the previous session following the White House announcement of the Stargate AI infrastructure plan.

Seoul stocks fell sharply after data showed South Korea’s economy barely grew in the fourth quarter of 2024 amid the worst political crisis in decades.

The Kospi slumped 1.2 percent to 2,515.49. Chipmaker SK Hynix dropped 2.7 percent despite the company reporting a record quarterly profit.

Australian markets fell notably to snap a three-day winning streak, with mining and consumer discretionary stocks leading losses.

The benchmark S&P/ASX 200 Index slid 0.6 percent to 8,378.70, while the broader All Ordinaries Index closed down 0.6 percent at 8,629.10. BHP, Rio Tinto and Fortescue Metals fell 1-2 percent.

Iluka Resources slumped 6.5 percent after Perpetual decreased its stake in the company. Myer soared 6.1 percent, while Premier Investments shed 0.7 percent after an agreement between the two for a merger.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index edged up by 0.2 percent to 13,060.08.

Europe

European stocks are flat to slightly higher on Thursday after China rolled out a basket of measures to funnel capital into the country’s stock markets.

Amid much uncertainty over the impact of U.S. President Donald Trump’s proposed tariffs on several countries, traders looked ahead to his keynote address at the World Economic Forum in Davos, Switzerland, later in the session for further direction.

While the French CAC 40 Index is up by 0.5 percent, the German DAX Index is up by 0.3 percent and the U.K.’s FTSE 100 Index is up by 0.1 percent.

In corporate news, Puma shares have plunged. The German sportswear company announced a cost-cutting program after preliminary result showed a decline in operational profit.

Associated British Foods has also moved to the downside after cutting guidance for sales growth at its Primark discount fashion retailer.

Swedish hygiene products maker Essity has also slumped after its fourth-quarter core earnings came in below expectations.

British online trading firm IG Group Holdings has also fallen despite posting a 30 percent increase in its first-half profit.

On the other hand, Sandvik AB has moved sharply higher after reporting a slight increase in its fourth-quarter net income.

U.S. Economic News

After reporting a rebound by first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing initial jobless claims saw further upside in the week ended January 18th.

The Labor Department said initial jobless claims rose to 223,000, an increase of 6,000 from the previous week’s unrevised level of 217,000. Economists had expected jobless claims to inch up to 220,000.

With the increase, jobless claims continued to regain ground after hitting a nearly eleven-month low in the week ended January 4th.

The report said the less volatile four-week moving average also crept up to 213,500, an increase of 750 from the previous week’s unrevised average of 212,750.

At 11 am, the Treasury Department is scheduled to announce the details of this month’s auctions of two-year, five-year and seven-year notes.

The Energy Information Administration is due to release its report on crude oil inventories in the week ended January 17th at 12 pm ET. Crude oil inventories are expected to decrease by 2.1 million barrels after falling by 2.0 million barrels in the previous week.