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U.S. stocks were set to open lower on Thursday ahead of the weekly jobless benefit claims report and a reading of manufacturing activity in the Philadelphia area.
After the S&P 500 achieved its record close earlier this week, investors have become more angst-ridden about pricey stocks, amid a lack of further progress on Congressional coronavirus relief aid and what analysts see as waning enthusiasm by the Federal Reserve to do more to help accelerate the economic recovery.
How are stock benchmarks performing?
Futures for the Dow Jones Industrial Average YM00, -0.38% YMU20, -0.38% declined 70 points, or 0.3%, at 27,562; those for the S&P 500 index ES00, -0.36% ESU20, -0.36% gave up 8.70 points, or 0.3%, at 3,364.25; Nasdaq-100 index futures NQ00, -0.13% NQU20, -0.13% pulled back 14.50 points to reach 11,317.50, a decline of 0.1%.
On Wednesday, the Dow DJIA, -0.30% shed 85.19 points, 0.3%, to end at 27,692.88, while the S&P 500 SPX, -0.44% fell 14.93 points, 0.4%, to close at 3,374.85, after setting an intraday record of 3,399.54. The Nasdaq Composite Index COMP, -0.57% slumped 64.38 points, or 0.6%, to close at 11,146.46, after also reaching a new intraday record of 11,257.42.
What’s driving the market?
The slight downtrend in the market early Thursday was partly attributed to dissatisfaction with the lack of progress in Congress on further fiscal stimulus, along with a Federal Reserve that painted an uncertain outlook for the economy in minutes of its July meeting published Wednesday while also sounding unenthusiastic about introducing a policy of yield-curve control. Under that policy, if adopted, the central bank would commit to buying bonds to keep yields below a specific level.
“The overall tone of the minutes was relatively dreary, while not giving any sense of monetary policy help being on the way,” wrote Stephen Innes, global chief market strategist at AxiCorp, in a daily note.
Read: After the S&P 500’s record run, UBS says look here for the next stock winners
In their discussions during their July 28-29 meeting, Fed officials noted that there had been an increase in uncertainty about the economic outlook since their prior meeting in mid-June.
Richmond Fed President Thomas Barkin, in remarks after the minutes were published on Wednesday, said uncertainty “matters a lot for players in the economy.”
Blue collar workers “seem frozen in place” and some business leaders say they are having trouble finding workers, even with the unemployment rate over 10%, Barkin said in a talk with the National Economists Club.
U.S. equity-index futures pared overnight decline though after Chinese Commerce Ministry spokesman Gao Feng in Beijing on Thursday confirmed plans to talk with U.S. counterparts to review progress on a trade deal, Reuters reported. The comments come after a planned meeting last weekend was canceled amid rising tensions between China and Washington.
Looking ahead, investors are watching for a reading on U.S. weekly jobless benefit claims after the government reported that first-time claims below 1 million for the first time since March 21. Economists polled by MarketWatch estimate that 910,000 first-time applicants filed for unemployment benefits during the week ended Aug. 15. The report is due at 8:30 a.m. Eastern Time.
Separately, investors will watch for the Philadelphia Federal Reserve index, a reading of business conditions in the Philadelphia area, to be released at the same time as claims, followed by a report on leading economic indicators at 10 a.m.
Which stocks are in focus?
- Shares of chip maker Nvidia Corp. NVDA, -0.99% were in focus after its data-center chips brought in more money than the gaming specialist’s core business for the first time in the company’s second quarter, and its other businesses also performed better than expected.
- Shares of Alibaba Group Holding BABA, +0.53% were in focus after its quarterly results.
- Intel Corp.’s stock INTC, -0.65% was on the move after the chip maker announced plans for a $10 billion buyback by the end of the year.
