Trump meets Zelenskiy, says Putin wants war to end, mulls trilateral talks
By Peter Nurse
Investing.com - U.S. stocks are seen opening sharply lower Thursday, falling back from record levels cautiously rebounding amid concern about global economic growth given a renewed surge in Covid cases just as the Federal Reserve starts thinking of tightening monetary policy.
At 7 AM ET (1100 GMT), the Dow Futures contract was down 500 points, or 1.5%, S&P 500 Futures traded 60 points lower, down 1.4%, while Nasdaq 100 Futures dropped 185 points, or 1.3%.
The broad-based S&P 500 closed Wednesday up 0.3% at an all-time high, the Dow Jones Industrial Average also gained 0.3%, or over 100 points, while the technology-heavy Nasdaq Composite closed just higher, another record close.
However, concerns are growing again about the impact of the Covid-19 virus, and particularly the delta strain, on global economic growth. This follows the Tokyo region declaring a state of emergency, on the eve of the Olympic Games.
A number of Asian countries are struggling with new outbreaks, while the U.K. recorded over 30,000 new cases on Wednesday, for the first time since January.
“New outbreaks are still one of the biggest downside risks in terms of the sustained economic recovery moving forward,” Mathias Cormann, secretary-general of the OECD, said Thursday.
This comes after the minutes from the Federal Reserve last policy meeting, released Wednesday, showed that some policymakers think the economic conditions need to start scaling back the central bank’s bond-buying program could be "met somewhat earlier than they had anticipated at previous meetings in light of incoming data."
With this in mind, investors will study the weekly initial jobless claims, at 8:30 AM ET (1230 GMT) for the latest gauge of the health of the U.S. labor market. The claims are expected to have fallen to a new post-pandemic low of 350,000, from 364,000 last week.
In corporate news, Alphabet (NASDAQ:GOOGL) will be in focus Thursday the day after a number of states took the owner of Google to court alleging it operates an illegal monopoly with its Google Play app store. Railroad stocks may also come in for scrutiny after a report by The Wall Street Journal saying that the Biden administration is preparing an executive order aiming to break the market power of big transportation companies.
Elsewhere, oil prices dropped Thursday, falling for the third consecutive session, on the back of the concerns about global growth and amid continued uncertainty over future OPEC+ production levels after a dispute halted talks earlier this week.
The American Petroleum Institute reported a reduction of almost 8 million barrels from stockpiles last week, largely matching the 8.2 million-barrel draw recorded during the previous week, and traders will be looking to see if the official figures from the U.S. Energy Information Administration confirm this.
By 2:05 AM ET, U.S. crude futures traded 0.6% lower at $71.74 a barrel, while the Brent contract fell 0.5% to $73.08.
Additionally, gold futures rose 0.9% to $1,817.40/oz, while EUR/USD traded 0.4% higher at 1.1840.