Stock futures in the U.S. edged lower on Thursday, suggesting Wall Street’s losing streak could extend for a third straight session.
Persistent doubts over the strength of the artificial intelligence trade remain a drag, with Nvidia (NASDAQ:NVDA) and Oracle (NYSE:ORCL) once again underperforming. Ahead of the open, Nvidia was down 1.2% and Oracle slid 3.5%.
The downward momentum picked up after fresh economic data painted a stronger picture of the U.S. economy. The Labor Department reported that initial jobless claims declined to 218,000 for the week ending September 20, down from the prior week’s revised figure of 232,000. Forecasts had pointed to an increase to 235,000.
The drop in claims could raise concerns that the Federal Reserve will see less need to continue with rate cuts.
Adding to the mix, the Commerce Department said durable goods orders rebounded 2.9% in August, after a revised 2.7% decline in July. Economists had expected another small decline of 0.5%.
Traders are now awaiting Friday’s personal income and spending data, which will include the Fed’s preferred inflation gauge.
Midweek Market Recap
On Wednesday, U.S. markets extended Tuesday’s slide. After starting the day mixed, the major indices moved decisively lower as trading progressed.
The Dow dropped 171.50 points, or 0.4%, to 46,121.28. The Nasdaq shed 75.62 points, or 0.3%, to 22,497.86, while the S&P 500 fell 18.95 points, or 0.3%, to close at 6,637.97.
Nvidia fell 0.9% in the session, adding to Tuesday’s 2.8% loss, while Oracle lost another 1.7%.
Powell’s Warning on Valuations
Concerns over valuations also weighed on sentiment after Fed Chair Jerome Powell gave a cautious assessment during remarks in Rhode Island on Tuesday. Powell said equity markets are “fairly highly valued” after their climb to record highs.
He described the rate outlook as a delicate balancing act:
- There is “no risk-free path” for policy.
- Cutting too fast could “leave the inflation job unfinished.”
- But holding rates too high for too long could trigger “unnecessarily” weak job conditions.
Powell called the current environment a “challenging situation,” with inflation risks tilted upward and employment risks tilted downward.
Sector Moves
Tech hardware was the day’s weakest group, with the NYSE Arca Computer Hardware Index tumbling 2.3% from a record close.
Gold producers also retreated, pulling the NYSE Arca Gold Bugs Index down 2.2%, while airline shares dropped as the NYSE Arca Airline Index slipped 1.6%.
Additional losses hit telecom, networking, and brokerage firms, though energy stocks rose alongside another jump in crude oil prices.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Leave a Reply