Stock futures dip slightly as investors digest Fed minutes, look ahead to labor data

Traders work on the floor of the New York Stock Exchange (NYSE) on November 11, 2022 in New York.

Spencer Platt | Getty Images

Stock futures were slightly lower early Thursday morning as investors looked beyond hawkish Federal Reserve meeting minutes released in the afternoon to jobs data coming later this week.

Futures tied to the Dow Jones Industrial Average lost 101 points to trade around 0.3%. S&P 500 and Nasdaq 100 futures also traded down 0.29% and 0.36%, respectively.

The moves follow a choppy trading session. Markets fell earlier in the day on a mixed bag of economic data, but stocks rallied until the closing bell. The Dow ended the day up 133 points, or 0.4%, while the S&P 500 and Nasdaq added 0.8% and 0.7%, respectively.

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November’s Job Openings and Labor Turnover, or JOLTS, report showed the labor market remained strong, fueling concerns that the Fed may continue to raise interest rates as long as the labor market remains hot. However, the ISM manufacturing index showed the sector contracting after 30 months of expansion, which investors saw as a positive indicator that previous rate hikes had the intended effect of cooling the economy.

Shares were traded mainly in the afternoon. But they gave up some of their gains after the release of minutes from the Fed’s December meeting that showed the central bank remained committed to higher interest rates “for some time”.

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Investors have “scars that are still fresh” after 2022, which delivered the worst year for the stock market since 2008, said Keith Buchanan, portfolio manager at GLOBALT Investments. He said investors are trying to balance what each new piece of economic data or Fed comment might indicate against broader concerns about the future.

“Every day that goes by that we get a data point that’s moving in the right direction is a positive,” Buchanan said. “But also quickly follows the concern of how sensitive and delicate this moment is.

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Investors will watch additional data on jobs, the trade deficit and business activity on Thursday. Fed spokesmen Raphael Bostic and James Bullard are also scheduled to speak.

On Friday, investors will evaluate data on nonfarm payrolls, the unemployment rate and hourly wages. Since the report could have a big impact on the Fed’s next moves, it has the potential to affect the market. Investors don’t want to see big gains in wage growth.


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