U.S. stock-index futures fell early Thursday, while investors wait for economic data including the weekly jobless benefit claims report, after the stock market posted one of its best daily gains in weeks on Wednesday.
How are equity indexes performing?
Futures for the Dow Jones Industrial Average
were off 57 points, or 0.2%, at 29,033; those for the S&P 500 index
were off 17.45 points at 3,561.75, a decline of 0.5%; Nasdaq-100 futures
were down 135.75 points, or 1.1%, at 12,275.75.
On Wednesday, Dow
surged 454.84 points, or 1.6%, ending at 29,100.50, or 1.5% away from its Feb. 12 closing high of 29,551.42. The S&P 500 index
climbed 54.19 points, or 1.5%, to settle at a record 3,580.84, its 22nd record close this year. The Nasdaq Composite Index
advanced 116.78 points to close at a record 12,056.44, a gain of 1%, and its 43rd record close of the year.
What’s driving the market?
After a day of records for the S&P 500 and the Nasdaq Composite and the rapid of approach of the Dow to its own record, investors will watch for U.S. weekly jobless benefits claims data Thursday morning.
However, the weekly update may initially inject a modicum of confusion in the market for investors due to changes to the way the Labor Department plans on accounting for seasonal adjustments in the data amid the COVID-19 pandemic. Seasonal adjustments are being dispensed with in favor of a method that should better address big differentials in actual claims, which could show a smaller number of claims being submitted. For example, seasonal adjustments led to an 18% gap between the government’s unadjusted claims of 821,591 and the adjusted figure of 1 million in the week ended Aug. 22 last week.
The market is expecting a consensus estimate of 940,000 jobless claims for the week ended Aug. 29. The claims data is due at 8:30 a.m. Eastern, at the same time a report on productivity costs and international trade is due.
Investors will also be watching a reading on the purchasing managers index in services from IHS Markit is due at 9:45 a.m. ET, and a survey by the Institute of Supply Management on activity in the service sector is due at 10 a.m. ET.
Market participants have been contending with a nearly incessant climb higher, with the focus on remedies for COVID helping to partially buttress the recent run-up. That said, Wednesday’s climb for stocks came even as large-capitalization technology-related stocks staged a pullback that didn’t disrupt the upward momentum of the broader equity market. Tech-related names have led the rebound of the market from coronavirus-lows but some strategists spotted encouraging signs that other areas beyond tech-related names were starting to rise.
“The more broad based this becomes, the more it signals a turning of the tide as far as the economic outlook is concerned, at least among those on Wall Street,” wrote Craig Erlam, senior market analyst at Oanda, in a daily research note.
However, there are concerns that market has climbed too far and too fast and that optimism over a vaccine for coronavirus is misplaced. The Centers for Disease Control and Prevention urged states to speed up approval for vaccine distribution sites by Nov. 1, which is just days before the presidential election.
Meanwhile, doubts about traction for further stimulus plans from Washington lawmakers has continued to haunt investors. Investors have been betting on Republicans and Democrats striking a deal later this month to offer additional relief to American consumers and businesses, after talks stalled in August. On Tuesday, House Speaker Nancy Pelosi said Democrats and Republicans still have “serious differences,” following a brief phone call.
Separately, tensions flared up between Beijing and Washington as the Trump administration signaled plans to impose new restrictions on Chinese diplomats in the U.S., citing Beijing’s use of similar measures on American envoys. The Chinese embassy in Washington responded by accusing the U.S. of violating international conventions.