This post was originally published on this site
Investing.com — U.S. stock futures drifted a tad lower in early dealings in New York on Thursday, pausing for breath after a sharp rally in response to the Federal Reserve’s first interest rate hike in over three years.
By 7:45 AM ET, Dow Jones futures were down 118 points, or 0.4%, while S&P 500 futures were down 0.4% and Nasdaq 100 futures were down 0.5%. The Dow had risen 1.5%, the S&P 500 2.2% and the Nasdaq Composite 3.8% on Wednesday after the Fed raised rates by 25 basis points and signaled at least another six quarter-point increases over the next 12 months.
The hike had long been anticipated by markets, which chose to focus instead on the accompanying economic forecasts from the Fed, which suggested that the tightening cycle could proceed without causing a recession.
Also helping the mood on Wednesday had been reports of a detailed peace plan drafted by Ukraine and Russia. However, the Kremlin said Thursday that reports of significant progress were “wrong” and Russia has reacted angrily to U.S. President Joe Biden’s designation of Vladimir Putin as a ‘war criminal’ on Wednesday. The comments followed reports of a Russian strike on a theater in Mariupol that was being used as a shelter by hundreds of civilians of all ages.
Analysts warned against what appeared to be some ‘magical thinking’ by both the Fed and by some market participants, noting that even a peace deal between Russia and Ukraine will not remove all the headwinds currently blowing.
“It would be unwise to assume that even if actions do follow words, there is a return to the pre-war status quo,” said Paul Donovan, chief economist of UBS Wealth Management, in a morning briefing. “Sanctions are likely to be unwound slowly…There has been an irreparable break in how the world works.”
Thursday will be the busiest day this week for U.S. economic data, with weekly jobless claims, and February housing starts and building permits data all due at 8:30 AM ET, along with the Philly Fed index. Industrial production data for February are due at 9:15 AM ET. Housing starts have shown tentative signs of weakening from 15-year highs in the last couple of months as mortgage rates have risen, but building permits have stayed close to their highs so far.
In corporate news, Accenture’s (NYSE:ACN) quarterly report included guidance that was above market consensus and a warning about the loss of business in Russia, while Dollar General (NYSE:DG) more or less met estimates for profit and revenue. FedEx (NYSE:FDX) reports after the bell.
In commodity markets, oil prices have rebounded as the Kremlin downplayed peace talk, and Saudi Arabia and the United Arab Emirates rebuffed pleas from U.K. Prime Minister Boris Johnson for more oil during a visit on Wednesday. By 7:35 AM ET, U.S. crude futures were up 5.1% at $99.87 a barrel, while Brent was up 5.4% at $103.29 a barrel.
Gold Futures were up 1.9% at $1,945 an ounce, while the Dollar Index, which tracks the greenback against a handful of advanced economy currencies, was down 0.4% at 98.22.
