U.S. Stocks May Extend Yesterday’s Rally In Early Trading

Stocks are likely to move to the upside in early trading on Thursday, extending the strong upward move seen in the previous session. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.5 percent.

Early buying interest may be generated in reaction to upbeat earnings news from Facebook parent Meta Platforms (META).

Shares of Meta are surging by 8.8 percent in pre-market trading after the company reported better than expected second quarter results and provided upbeat guidance.

Restaurant chain Shake Shack (SHAK) is also seeing substantial pre-market strength after reporting second quarter revenues that exceeded analyst estimates.

On the other hand, shares of Moderna (MRNA) may come under pressure after the drugmaker reported better than expected second quarter results but lowered its full-year sales guidance.

Stocks may also benefit from optimism about the outlook for interest rates after the Labor Department released a report showing first-time claims for U.S. unemployment benefits rose to their highest level in almost a year in the week ended July 27th.

The report said initial jobless claims climbed to 249,000, an increase of 14,000 from the previous week’s unrevised level of 235,000. Economists had expected jobless claims to inch up to 236,000.

With the bigger than expected increase, jobless claims reached their highest level since hitting 258,000 in the week ended August 5, 2023.

Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of July. The ISM’s manufacturing PMI is expected to inch up to 48.8 in July from 48.5 in June, but a reading below 50 would still indicate contraction.

The Commerce Department is also due to release its report on construction spending in the month of June. Construction spending is expected to rise by 0.2 percent in June after edging down by 0.1 percent in May.

After moving sharply higher early in the session, stocks continued to turn in a strong performance throughout the trading day on Wednesday. The major averages all moved to the upside after ending Tuesday’s trading mixed, with the tech-heavy Nasdaq posting a particularly strong gain.

The Nasdaq soared 451.98 points or 2.6 percent to 17,599.40, more than offsetting the 1.3 percent slump seen during Tuesday’s session. The S&P 500 also jumped 85.86 points or 1.6 percent to 5,522.30, while the Dow rose 99.46 points or 0.2 percent to 40,842.79.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday. Japan’s Nikkei 225 Index plunged by 2.5 percent and China’s Shanghai Composite Index dipped by 0.2 percent, while South Korea’s Kospi rose by 0.3 percent.

Meanwhile, European stocks have moved mostly lower on the day. While the French CAC 40 Index has slumped by 1.2 percent, the German DAX Index is down by 1.0 percent and the U.K.’s FTSE 100 Index is nearly unchanged.

In commodities trading, crude oil futures are rising $0.38 to $78.29 a barrel after soaring $3.18 to $77.91 a barrel on Wednesday. Meanwhile, after jumping $21.10 to $2,473 an ounce in the previous session, gold futures are surging $24 to $2,497 an ounce.

On the currency front, the U.S. dollar is trading at 150.58 yen versus the 149.98 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0795 compared to yesterday’s $1.0826.