On Thursday, U.S. stock index futures were mixed as investors turned cautious ahead of a jobs report after last week’s weaker-than-expected economic data that had sparked fears of a recession.
Most megacap and growth stocks were volatile in premarket trading. The Nasdaq closed 1% lower in the previous session, as tech stocks lost steam after a brief rebound following a global stock rout, and weak demand in a 10-year Treasury auction.
Global markets are experiencing heightened volatility this week after dour economic reports coupled with unwinding of currency carry trade positions pushed the Japanese yen higher after the Bank of Japan raised interest rates on July 31.
The market situation has turned the focus on U.S. weekly jobless claims data, due at 8:30 a.m. ET, which is expected to show a marginal dip in the number of Americans claiming State unemployment benefits in the week ending Aug. 3.
“U.S. weekly jobless claims will be very sensitive given the positions that have stacked up looking for the Fed to cut rates relatively aggressively by year-end,” said Marc Ostwald, chief economist & global strategist at ADM Investor Services.
J.P. Morgan has raised the odds of a U.S. recession by the end of this year to 35% from 25%, citing easing labor market pressures.
Money markets currently see a 71.5% chance of a 50-basis-points rate cut by the Federal Reserve in September, with the possibility of two more cuts by the end of 2024, according to CME’s FedWatch Tool.
Comments from Richmond Fed President Thomas Barkin, who will be speaking at 3 p.m. ET, will also be closely monitored for any clues on the U.S. central bank’s next move.
At 06:45 a.m. ET, Dow E-minis were down 90 points, or 0.23%, S&P 500 E-minis were down 9.25 points, or 0.18% and Nasdaq 100 E-minis were up 11.5 points, or 0.06%.
The CBOE Market Volatility Index, also known as Wall Street’s “fear gauge”, ticked up to 28.51 points, up from Wednesday’s low of 21.97.
On the earnings front, Bumble (NASDAQ: BMBL) slashed its annual revenue growth forecast, stoking worries about the dating app operator’s growth plans, sending its shares down 39.7% in premarket trading. Rival Match Group (NASDAQ: MTCH) also fell 2.6%.
Warner Bros Discovery (NASDAQ: WBD) dropped 12.3% after it wrote down the value of its TV assets due to the uncertainty of fees from cable and satellite distributors and sports rights renewals.
Monster Beverage (NASDAQ: MNST) lost 8.3% after the energy drinks maker missed market expectations for second-quarter sales as budget-conscious consumers kept a tight lid on spending.
Robinhood (NASDAQ: HOOD) added 1.5% after the retail trading app beat Wall Street expectations for second-quarter earnings, as interest in meme stocks and cryptocurrencies soared, and said it continued to gain retail trading market share from rivals.
Eli Lilly (NYSE: LLY) jumped 7% after the drugmaker raised its annual profit forecast, and sales of its popular weight-loss drug Zepbound crossed $1 billion for the first time in a quarter.
(Source: Reuters)
Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market.
