Dow Futures Down 165 Pts; Jobless Claims Data Due By

© Reuters.

By Peter Nurse

-- U.S. stocks are Futures trading platformseen opening lower Thursday, handing back some of the previous session’s outsized gains in the wake of the latest Federal Reserve policy-setting meeting and ahead of the latest employment data.

At 7 AM ET (1100 GMT), the Dow Futures contract was down 165 points, or 0.5%, S&P 500 Futures traded 30 points, or 0.7%, lower and Nasdaq 100 Futures dropped 120 points, or 0.9%.

The three main Wall Street indices closed sharply higher Wednesday after Federal Reserve Chair Jerome Powell downplayed the likelihood of even bigger rate increases after the U.S. central bank had raised interest rates by 50 basis points, its largest increase since 2000.

The blue chip Dow Jones Industrial Average rose just short of 1,000 points, or 2.8%, the broad-based S&P 500 gained 3%, its largest jump since 2020, and the Nasdaq Composite rose 3.2%.

Still, despite Powell ruling out a hike of 75 basis points, the policymakers still made clear their resolve to frontload rate tightening due to inflation pressures.

Analysts at BNP Paribas expect the Fed to hike interest rates by 50 basis points four times in succession with three more hikes of the same size at the Fed's June, July and September meetings, then a shift to 25 bps moves afterwards.

Investors will also keep an eye on the weekly initial jobless claims data, due at 8.30 AM EDT, after Powell remarked on the tightness of the labor market yet private-sector payrolls rose by only 247,000 in the month through mid-April, the smallest gain in over a year.

The monthly official jobs report is due on Friday, and is expected to show an addition of just under 400,000 to nonfarm payrolls in April.

Earnings continue to pour in Thursday, with energy giant Shell (OTC:RYDAF) reporting a record first quarter profit of $9.13 billion, even after writing down $3.9 billion as a result of its decision to exit its operations in Russia.

Rival oil major ConocoPhillips (NYSE:COP) is also set to report before the bell, while the likes of Block (NYSE:SQ), DoorDash (NYSE:DASH), Shake Shack (NYSE:SHAK) and Zillow (NASDAQ:ZG) are due after the market closes.

Elsewhere, both Etsy (NASDAQ:ETSY) and eBay (NASDAQ:EBAY) slumped in premarket trade after the companies offered up weak guidance for the current quarter, suggesting the e-commerce sector is cooling off after a pandemic-fueled boost.

Oil prices edged higher Thursday ahead of the latest meeting of the Organization of the Petroleum Exporting Countries and allies, known as OPEC+.

The group is widely expected to agree to another modest monthly increase of 432,000 barrels per day in its production target for June, the day after the European Union proposed a phased oil embargo on Russia.

By 7 AM ET, U.S. crude futures traded 0.3% higher at $108.18 a barrel, while the Brent contract rose 0.6% to $110.77.

Additionally, gold futures rose 1.4% to $1,895.51/oz, while EUR/USD traded 0.3% lower at 1.0592.

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