(Reuters) – U.S. stock index futures declined on Thursday as traders awaited economic data for clues on the economic outlook and the possibility of additional interest rate cuts from the Federal Reserve, while also keeping an eye on potential escalations in Middle East conflicts.
Wall Street’s three major indexes ended the previous session largely unchanged after a private survey indicated that the labor market was not experiencing sharp deterioration.
Despite this, caution remained as investors considered the potential scale of Israel and the United States’ response to Iran’s recent actions against Israel. The CBOE volatility index, a gauge of market fear, remained elevated, hovering around 19.96, marking its highest level in over three weeks.
The primary focus for the day is a report anticipated to reveal that the number of Americans applying for unemployment benefits rose to 220,000 for the week ending September 28, up from 218,000 the prior week. Key nonfarm payroll figures are expected on Friday.
Additionally, the Institute for Supply Management’s report on services sector activity, which constitutes a major part of the U.S. economy, is scheduled for release. For September, the index is projected to remain in expansion territory at 51.7.
As of 05:36 a.m. ET, Dow E-minis were down 124 points, or 0.29%; S&P 500 E-minis dropped 17.25 points, or 0.30%; and Nasdaq 100 E-minis decreased by 84.5 points, or 0.42%.
U.S. stocks have experienced a rally for most of the year, with the benchmark S&P 500 confirming a bull market, recording gains in eight of the last nine months due to expectations for lower borrowing costs.
Tech stocks have been at the forefront of this surge, fueled by the potential for earnings growth stemming from artificial intelligence integration.
Investors will also consider remarks from Fed officials Raphael Bostic and Neel Kashkari later today. The likelihood of a 25 basis points rate cut by the U.S. central bank in November is currently estimated at 63.9%, an increase from 50.7% last week, according to the CME Group’s FedWatch Tool.
Meanwhile, a strike by workers on the East and Gulf coasts has entered its third day. Economists at Morgan Stanley warned that a prolonged strike could lead to increased consumer prices, particularly in food costs.
Among premarket movers, oil stocks like Occidental Petroleum and Exxon Mobil remained steady, though crude prices rose by over 1% as investors factored in potential supply disruptions in the Middle East. [O/R]
Levi Strauss saw shares plunge by 11.3% after announcing it was exploring a sale of its underperforming Dockers brand and projecting fourth-quarter revenue to fall short of expectations.
Tesla’s stock fell by 1.7% following a report of a smaller-than-anticipated rise in third-quarter deliveries, alongside the discontinuation of its most budget-friendly Model 3 compact sedan in the U.S.
(Reporting by Johann M Cherian in Bengaluru; Editing by Pooja Desai)