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U.S. stock-index futures struggled for direction Thursday in choppy trade as investors assessed weekly jobs data and continued to monitor corporate earnings reports after bouncing back sharply in the previous session after back-to-back losses.
What’s happening
-
Futures on the Dow Jones Industrial Average
YM00,
+0.10%
were up 21 points, or 0.1%, at 32,791. -
S&P 500 futures
ES00,
+0.23%
rose 6.75 points, or 0.2%, to 4,163. -
Nasdaq-100 futures
NQ00,
+0.37%
gained 36 points, or 0.3%, at 13,307.50.
The Dow
DJIA,
jumped 416.33 points, or 1.3%, on Wednesday, while the S&P 500
SPX,
rose 1.6% and the Nasdaq Composite
COMP,
jumped 2.6%.
What’s driving the market
Investors were looking for direction Thursday after stocks bounced back following upbeat U.S. economic data that helped soothe recession fears, though Federal Reserve officials continue to warn that achieving a so-called soft landing for the economy as they raise interest rates to battle inflation will be difficult.
Market participants expect that the prospect of an economic slowdown will lead the Fed to slow interest rate hikes, with fed-funds futures markets pricing in rate cuts in 2023.
“It’s worth noting that stock markets rallied on the signs of stronger-than-expected growth. This is significant because recently they’ve been rallying on signs of weaker growth, which would mean that the Fed was likely to stop hiking rates and start cutting early on,” said Marshall Gittler, head of investment research at BDSwiss Holding Ltd., in a note.
“So stock markets rise when growth looks strong and rise when growth looks weak. Who said markets are consistent?” he wrote.
Another busy day of earnings looms. Shares of Lucid Group Inc.
LCID,
were lower in premarket trade after the electric-vehicle maker late Wednesday announced a reduction in its production forecast. Lucid said it now expects its 2022 production volume to hit 6,000 to 7,000 vehicles, after stating 12,000 to 14,000 vehicles in May.
In economic data, first-time claims for U.S. jobless benefits rose by 6,000 to 260,000 in the week ended July 30, the Labor Department said Thursday. The July jobs report is due Friday.
Employment gains in July are expected to drop to 258,000 from 372,000 in the prior month, a poll of economists by The Wall Street Journal estimates. If so, it would mark the smallest increase since December 2021.
See: Hiring slowdown? U.S. seen adding just 258,000 jobs in July
“Looking back at July, we started the month with the fear that a lot of bad things could happen—but what we actually saw was a rebound. As we move forward into August, many of those fears appear to already be priced in, while others do not look nearly as bad as they did a couple of months ago,” Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, wrote in a note.
“July’s rebound was the markets taking stock of the fears versus the reality. And while risks remain, it looks like August could provide even more evidence that things are looking up,” he said.
Hear from Carl Icahn at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. The legendary investor will reveal his view on this year’s wild market ride.
