U.S. Stocks May Move Back To The Downside In Early Trading

After recovering from early weakness to end the previous session sharply higher, stocks may move back to the downside in early trading on Thursday. The major index futures are currently pointing to a notably lower open for the markets, with the S&P 500 futures down by 1.1 percent.

Ongoing concerns about the economic impact of President Donald Trump’s new tariffs on Canada, Mexico and China may lead traders to cash in on yesterday’s gains.

While Trump’s decision to grant a one-month tariff exemption for automakers contributed to the turnaround on Wednesday, uncertainty about further exemptions may weigh on Wall Street.

A report from Bloomberg said Trump is considering exempting certain agricultural products from the tariffs imposed on Canada and Mexico.

Traders may also look to move money out of the markets amid worries about the economy ahead of Friday’s closely watched monthly jobs report.

Economists currently expect employment to climb by 160,000 jobs in February after rising by 143,000 jobs in January. The unemployment rate is expected to remain unchanged in February after edging down to 4.0 percent in January.

With the more closely watched monthly jobs report looming, the Labor Department released a report this morning showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended March 1st.

The report said initial jobless claims dipped to 221,000, a decrease of 21,000 from the previous week’s unrevised level of 242,000. Economists had expected jobless claims to edge down to 235,000.

The Commerce Department also released a report showing the U.S. trade deficit widened by more than expected in the month of January.

The report said the trade deficit surged to $131.4 billion in January from a revised $98.1 billion in December. Economists had expected the trade deficit to jump to $123.0 billion from the $98.4 billion originally reported for the previous month.

The notably wider trade deficit came as the value of imports soared by 10.0 percent to $401.2 billion, while the value of imports increased by 1.2 percent to $2.698 billion.

Stocks showed a significant turnaround over the course of the trading session on Wednesday, recovering from early weakness to end the day sharply higher. With the rebound, the major averages regained some ground after moving substantially lower over the past several sessions.

The major averages pulled back off their best levels going into the close but still posted strong gains. The Nasdaq surged 267.57 points or 1.5 percent to 18,552.73, the S&P 500 shot up 64.48 points or 1.1 percent to 5,842.63 and the Dow jumped 485.60 points or 1.1 percent to 43,006.59.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Thursday. Japan’s Nikkei 225 Index climbed by 0.8 percent, China’s Shanghai Composite Index jumped by 1.2 percent and Hong Kong’s Hang Seng Index surged by 3.3 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the German DAX Index is up by 0.2 percent, the French CAC 40 Index is down by 0.6 percent and the U.K.’s FTSE 100 Index is down by 1.1 percent.

In commodities trading, crude oil futures are rising $0.20 to $66.51 a barrel after plunging $1.95 to $66.31 a barrel on Wednesday. Meanwhile, after inching up $5.40 to $2,926 an ounce in the previous session, gold futures are falling $15.80 to $2,910.20 an ounce.

On the currency front, the U.S. dollar is trading at 147.56 yen versus the 148.88 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0824 compared to yesterday’s $1.0789.

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