Stock futures opened flat in overnight trading after the market’s comeback rally hit a speed bump on Wednesday.
Futures on the Dow Jones Industrial Average added 47 points, or 0.14%. S&P 500 futures ticked 0.10% and Nasdaq 100 futures rose 0.11%.
The S&P 500 saw a two-day winning streak on Wednesday, closing regular trading hours 0.1% lower. The Dow also lost 71.34 points, or 0.2%. Meanwhile, the Nasdaq Composite rose 0.1% to hit another record high.
Eight out of eleven S&P 500 sectors ended in the red, led by utilities, which lost 1.1%. However, energy stocks like Exxon Mobil, Occidental Petroleum and Devon Energy rose as oil prices continued to rise. Tech names like Tesla and Netflix also closed higher.
Despite Wednesday’s hiccup, the three major indices rose more than 1% this week, rebounding from a sell-off last week after the Federal Reserve raised inflation expectations and forecast interest rate hikes back in 2023.
Fed Chairman Jerome Powell’s comments during a congressional hearing on Tuesday reiterated that inflationary pressures should be temporary, which appeared to calm market sentiment.
“Despite the optimism, the markets threaten to become complacent – and prone to shocks. Any signal that interest rates and bond yields could rise, even without pronounced inflationary pressures, could shake the exuberance of the markets, ”said Gaurav Mallik, chief portfolio strategist at State Street Global Advisors, said.
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“Central banks will be walking a tightrope between allowing the economy to run up – which has proven to be a bad idea in the past – and managing inflation risk,” he added.
Investors expect new unemployment claims data to be released Thursday for the latest outlook on unemployment.
The Fed’s annual bank stress test results are due to be released after the bell on Thursday. The test examines how banks behave during various hypothetical economic downturns. According to the Fed’s findings, banks usually announce how much capital they can free up in the form of dividends and buybacks.
Darden Restaurants, Nike and FedEx will release their quarterly results on Thursday.
– CNBC’s Hugh Son contributed to the coverage.