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Stock-index futures point to a modestly lower start for Wall Street on Thursday after a news report said Chinese officials have doubts about the prospects for a long-term trade deal with the U.S.
The weaker tone comes a day after the S&P 500 scored a record close in the wake of a Federal Reserve decision to cut interest rates for the third time this year, while also signaling that it would pause before making any further moves on monetary policy.
How are major indexes performing?
Futures on the Dow Jones Industrial Average YMZ19, -0.20% were down 75 points, or 0.3%, at 27,062, while S&P 500 futures ESZ19, -0.21% declined 9.05 points, or 0.3%, to trade at 3,038.75. Nasdaq-100 futures NQZ19, -0.10% were off 14.75 points, or 0.2%, at 8,096.25.
Stocks edged higher on Wednesday during Federal Reserve Chairman Jerome Powell’s news conference, with the S&P 500 SPX, +0.33% ending the day up 9.88 points, or 0.3%, at 3,046.77 — a record close. The Dow Jones Industrial Average DJIA, +0.43% rose 115.27 points, or 0.4%, to close at 27,186.69, leaving it 0.6% away from its record close set on July 15. The Nasdaq Composite COMP, +0.33% finished at 8,303.98, up 27.12 points, or 0.3% — 0.3% off its record finish from July 26.
What’s driving the market?
Chinese officials are expressing doubt about the ability to reach a comprehensive, long-term trade deal with the U.S. despite progress toward signing a “phase one” agreement, Bloomberg reported Thursday. The report said Chinese officials have concerns about President Donald Trump’s impulsive nature and fear he could even back out of the limited deal that both Beijing and Washington have signaled they want to sign in coming weeks.
On Wednesday, the Fed, as expected, cut its benchmark interest rate for the third time in as many meetings on Wednesday, but signaled it may pause before making further changes to its monetary policy settings to see whether those steps would be enough to sustain the economic expansion.
“The takeaway for investors was that while the Fed wants to pause, it will still cut rates if anything adverse happens, whereas it won’t raise them even if the economy picks up steam — which was enough to propel the likes of the S&P 500 to new record highs,” said Marios Hadjikyriacos, investment analyst at XM, in a note.
Third quarter earnings from Apple AAPL, -0.01% and Facebook FB, -0.56% late Wednesday were also well received as the corporate reporting season rolls out.
The economic calendar Thursday features U.S. weekly jobless claims for the week ended Oct. 26, along with the third-quarter employment cost index and September readings on personal income, consumer spending and core personal consumption expenditure inflation — the Fed’s favored inflation reading.
Economists surveyed by MarketWatch forecast the employment costs to have risen 0.7% in the third quarter, picking up from 0.6% in the previous three months. Personal income and spending are both expected to rise 0.3%, while inflation is expected to be up 0.1%.
What companies are in focus?
Investors were also reacting to a slew of earnings reports that came out after Wednesday’s closing bell.
Apple AAPL, -0.01% reported profits in the third quarter dipped by 3% but beat analysts’ expectations, while iPhone sales fell by 9%, but the stock was 1.8% in premarket action after the phone maker delivered an upbeat holiday forecast.
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Facebook Inc. FB, -0.56% shares were up 3.9% after announcing third-quarter results that soundly beat earnings forecasts and topped revenue expectations.
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Shares of Starbucks Corp. SBUX, +0.07% gained 2.2% after the coffee chain reported fiscal fourth-quarter results that saw revenue and same-store sales boosted following the summer rollout of its Nitro Cold Brew beverage.
The stream continued Thursday, with results ahead of the opening bell from a number of heavyweights, including DuPont de Nemours, Inc. DD, -2.60% , shares of which rose 1.1% in premarket action after the materials company reported a 26% decline in profit in the third quarter, less than analysts were expecting.
Bristol-Myers Squibb Co. BMY, +1.97% was also due to report before the bell Thursday.
Kraft Heinz Co. KHC, +1.28% shares rallied 5.2% before the start of trade Thursday after the food company reported third-quarter earnings and sales that beat expectations.
Coffee-and-donut chain Dunkin Brands Group Inc. DNKN, -0.56% said profit rose for its third quarter as revenue increased from a year earlier. The company’s stock rose 0.9% in premarket action.
Shares of Marathon Petroleum Corp. MPC, -2.69% were up 0.5% in premarket trade after the energy company reported profit that beat expectations but missed on revenue, while announcing plans to spin off its Speedway business and that its long-time chief executive plans to retire.
Shares of Twitter Inc. TWTR, +0.03% were also in the spotlight Thursday, off 1.8% in the premarket, a day after the social media company said it would ban most political advertising from its service.
Fiat Chrysler Automobiles N.V. FCAU, +5.27% FCA, +8.25% shares jumped 9% in Italy while Peugeot S.A. UG, -12.94% shares fell more than 12% in Paris after the two companies said they would combine in a 50-50 merger.
How are other markets trading?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -2.12% fell 5.8 basis points to 1.736%.
In commodities markets, the price of West Texas Intermediate crude oil CLZ19, -1.09% for December delivery fell 43 cents, or 0.8% to $56.62 a barrel. The value of an ounce of gold for December delivery GCZ19, +0.75% rose $13.40, or 0.9%, to $1,510.10. The U.S. dollar, meanwhile, edged down 0.4%, according to the dollar index. DXY, -0.37%
In Asia overnight stocks traded mixed, with the China CSI 300 000300, -0.11% falling 0.1%, the Nikkei 225 NIK, +0.37% adding 0.4% and the Stoxx Europe 600 SXXP, -0.20% declining 0.4%.
