Following the sell-off seen in the previous session, stocks may move back to the upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.2 percent.
Bargain hunting may contribute to initial strength on Wall Street after the steep drop on Wednesday dragged the major averages down to their lowest closing levels in over a month.
Tech stocks may help lead the rebound, with tech giants Facebook (FB), Apple (AAPL), Amazon (AMZN) and Netflix (NFLX) all moving higher in pre-market trading.
Buying interest may be somewhat subdued, however, as concerns about inflation continue to hang over the markets.
Potentially adding to inflation worries, the Labor Department released a report showing producer prices increased by more than expected in the month of April.
The Labor Department said its producer price index for final demand rose by 0.6 percent in April after jumping by 1.0 percent in March. Economists had expected producer prices to increase by 0.3 percent.
Excluding prices for food, energy, and trade services, core producer prices, advanced by 0.7 percent in April after climbing by 0.6 percent in March. Core prices were expected to rise by 0.4 percent.
The report also showed the annual rate of producer price growth accelerated to 6.2 percent in April from 4.2 percent in March, with prices showing the biggest annual increase since 12-month data were first calculated in November of 2010.
Meanwhile, a separate report from the Labor Department showed first-time claims for U.S. unemployment benefits fell by more than expected in the week ended May 8th.
The report said initial jobless claims dipped to 473,000, a decrease of 34,000 from the previous week’s revised level of 507,000.
Economists had expected jobless claims to edge down to 490,000 from the 498,000 originally reported for the previous week.
With the bigger than expected decrease, jobless claims once again fell to their lowest level since hitting 256,000 in the week ended March 14, 2020.
Stocks moved sharply lower over the course of the trading day on Wednesday, extending the pullback seen earlier in the week. With the steep drop on the day, the major averages ended the session at their lowest closing levels in over a month.
The major averages saw further downside going into the close, ending the day just off their lows of the session. The Dow tumbled 681.50 points or 2 percent to 33,587.66, the Nasdaq plummeted 357.75 points or 2.7 percent to 13,031.68 and the S&P 500 plunged 89.06 points or 2.1 percent to 4,063.04.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index dove by 2.5 percent, while China’s Shanghai Composite Index slumped by 1 percent.
The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index has tumbled by 1.4 percent, the German DAX Index is down by 0.6 percent and the French CAC 40 Index is down by 0.5 percent.
In commodities trading, crude oil futures are slumping $1.33 to $64.75 a barrel after climbing $0.80 to $66.08 a barrel on Wednesday. Meanwhile, after slumping $13.30 to $1,822.80 an ounce in the previous session, gold futures are falling $4.80 to $1,818 an ounce.
On the currency front, the U.S. dollar is trading at 109.53 yen versus the 109.67 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.2087 compared to yesterday’s $1.2072.
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