Dow Futures Up 30 Pts; Powell Speech, Jobless Claims in Focus

By Peter Nurse

Investing.com -- U.S. stocks are seen opening largely flat, stabilizing after the previous session’s strong gains, as investors search for clues of the Federal Reserve's next move.

At 07:00 ET (11:00 GMT), the Dow Futures contract was up 30 points or 0.1%, S&P 500 Futures traded 3 points or 0.1% higher, and Nasdaq 100 Futures climbed 5 points or 0.1%.

The major Wall Street averages posted solid gains on Wednesday, with the blue-chip Dow Jones Industrial Average closing over 400 points or 1.4% higher, the broad-based S&P 500 up 1.8%, and the tech-heavy Nasdaq Composite 2.1% higher.

Although this was the best day since Aug. 10 for all three averages, snapping seven sessions of consecutive decline, sentiment overall remains weak as investors worry that the Federal Reserve will continue to aggressively raise interest rates in order to combat inflation at historic highs.

Influential investment bank, Goldman Sachs, lifted its forecast for the pace of U.S. interest rate hikes. It now expects the Fed to hike by 75 basis points this month and 50 basis points in November, up from their previous forecasts of 50 basis points and 25 basis points respectively. This is followed by a 25 basis points move in December.

With this in mind, investors will focus on a speech by Fed Chair Jerome Powell at the Cato Institute's virtual meeting, due at 09:10 ET (13:10 GMT), as well as the weekly initial jobless claims data, at 08:30 ET (12:30 GMT).

In Europe, the European Central Bank is widely expected to lift its key interest rate again, after a hike of 50 basis points in July, in an attempt to curb soaring inflation.

In the corporate sector, GameStop (NYSE:GME) stock surged over 9% premarket after the troubled video game retailer reported a narrow-than-expected second quarter loss while also announcing a partnership with crypto firm FTX.

Tesla (NASDAQ:TSLA) is likely to also be in the spotlight after the electric-car maker reported a near tripling of sales of Chinese-made vehicles in August from a month ago, after ramping up output at its Shanghai plant.

Oil prices edged higher Thursday, ahead of the release of key official U.S. crude inventory data.

Crude has been hit hard of late, with both benchmarks falling to their lowest levels since January, on demand concerns as China pushes on with its COVID Zero policy and central banks tighten monetary policy to fight inflation.

Data from the American Institute of Petroleum, released Wednesday, showed that U.S. crude stockpiles unexpectedly rose last week, raising additional concerns over slowing global oil demand.

Official inventory data is due later in the session, a day later than usual due to Monday's Labor Day holiday, and traders will be looking for confirmation of the API's number.

Crude prices had posted early gains after a forecast of slightly higher demand and tighter supply going into 2023 by the U.S. Energy Information Agency.

By 07:00 ET, U.S. crude futures traded 0.4% higher at $82.28 a barrel, while the Brent contract rose 0.4% to $88.35.

Additionally, gold futures rose 0.5% to $1,735.75/oz, while EUR/USD traded 0.1% higher at 1.0012.