Dow futures fall 70 pts; consolidating ahead of jobless claims

By Peter Nurse    

Investing.com -- U.S. stocks are seen opening slightly lower Thursday, consolidating after the previous session’s sharp Jerome Powell-inspired gains ahead of the release of more important economic data.

At 07:00 ET (12:00 GMT), the Dow Futures contract was down 70 points, or 0.2%, S&P 500 Futures traded 5 points, or 0.1%, lower and Nasdaq 100 Futures dropped 20 points, or 0.2%.

The blue chip Dow Jones Industrial Average gained over 700 points, or 2.2%, on Wednesday, while the broad-based S&P 500 rose 3.1% and the tech-heavy Nasdaq Composite closed 4.4% higher.

This surge followed Federal Reserve Chair Jerome Powell teeing up a smaller half-percentage point interest rate hike in December, when the Fed meets for the last time this year.

The U.S. central bank has hiked interest rates by 75 basis points in each of its last four policy-setting meetings in an attempt to curb inflation at record levels, but stock markets posted a strong November on expectations for such a pivot.

The Dow gained 5.7% in November, the S&P 500 rose 5.4% and the Nasdaq Composite ended the month 4.4% higher, posting two consecutive positive months for the first time since the end of last year.

The main focus Thursday will be on the economic data dump, led by the weekly jobless claims numbers, especially ahead of Friday’s official monthly jobs report. These numbers will provide more clarity on the strength of the labor market ahead of the December Fed meeting.

There will also be data on personal income and spending, as well as construction spending and the ISM manufacturing PMI.

In the corporate sector, earnings are due from the likes of Kroger (NYSE:KR), Ulta Beauty (NASDAQ:ULTA) and Dollar General (NYSE:DG).

Elsewhere, Salesforce (NYSE:CRM) will be in the spotlight after the software company announced that Bret Taylor would step down as co-chief executive officer in January and that co-founder Marc Benioff will become the sole CEO.

Snowflake (NYSE:SNOW) stock traded sharply lower premarket after the cloud computing firm issued light revenue guidance, while Five Below (NASDAQ:FIVE) stock climbed after the discount retailer raised its full-year guidance on the back of strong third-quarter numbers.

Crude oil prices edged higher Thursday with the focus on the weekend’s OPEC+ meeting in terms of future global crude supply.

The Organization of the Petroleum Exporting Countries and allies meet virtually on Sunday, and the fact the delegates are not meeting in person is seen as indicating that future production levels will remain unchanged.

However, crude prices have fallen close to their lowest levels this year, and are below the levels which prompted the group to slash output by 2 million barrels a day last month.

Crude prices had rallied sharply this week after data showed U.S. inventories shrank substantially more than expected in the prior week, with data from the Energy Information Administration pointing to a drop of over 12 million barrels.

By 07:00 ET, U.S. crude futures traded 1.3% higher at $81.62 a barrel, while the Brent contract rose 1.2% to $88.02. 

Additionally, gold futures rose 1.9% to $1,793.95/oz, while EUR/USD traded 0.3% higher at 1.0440.