Traders on the floor of the New York Stock Exchange.
US stock futures were stable in overnight trading on Wednesday as investors braced for more corporate earnings and jobs data.
Dow futures only fell 10 points. S&P 500 futures were unchanged and Nasdaq 100 futures only gained 0.04%.
On Wednesday, the Dow rose 44 points, helped by a 2.4% rise in Apple stock. The S&P 500 rose 0.12% after hitting an intraday high at the beginning of the session. The Nasdaq Composite was the relative underperformer, down 0.2%. However, the Nasdaq 100 closed at an all-time high.
The small-cap benchmark Russell 2000 lost 1.7% on Thursday, bringing its losses since weekday to more than 3.4%.
Federal Reserve Chairman Jerome Powell – in a testimony to the House Financial Services Committee – suppressed investor fears that the central bank’s loose policy would soon be reversed, even in the face of inflation. June producer prices showed higher than expected inflation on Thursday.
“At our June meeting, the committee discussed the progress made by the economy towards our goals since we adopted our asset buying guidelines last December. While the ‘significant further progress’ standard is still a long way off, attendees expect progress to continue, “Powell said.
Powell is due to testify in the Senate Thursday.
“Fed Chairman Powell helped ease fears by reiterating that these bad inflation reports were temporary,” said Jim Paulsen, chief investment strategist at Leuthold Group, noting the decline in bond yields following the hot inflation report. “Obviously, bond investors are buying the Fed’s inflation narrative.”
The earnings season continued on Wednesday with strong results from banks like Bank of America and others; However, stock reactions remained subdued. All 12 of the S&P 500 companies that released quarterly results this week through Wednesday morning have topped earnings per share estimates, but the group is seeing an average decline of 0.56% following the results.
Reports will continue to arrive on Thursday, with Morgan Stanley, US Bancorp., UnitedHealth, Cintas and Progressive releasing all results.
Investors will also get a glimpse of the US labor market recovery on Thursday.
The initial applications for unemployment insurance from last week should be published on Thursday at 8:30 a.m. Economists polled by Dow Jones expect 360,000 initial jobless claims, compared to 373,000 in the week ending July 3.
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