U.S. equity futures traded close to flat on Thursday as investors adopted a cautious stance ahead of Friday’s closely watched July employment report, which is expected to provide fresh guidance on the outlook for Federal Reserve interest rate policy.
With one of the week’s most important economic releases still to come, traders appeared reluctant to place aggressive bets at the opening bell.
Weekly jobless claims remain lower than expected
Ahead of Friday’s payrolls release, the Labor Department reported that initial jobless claims rose modestly during the week ended August 1.
New unemployment benefit claims increased to 199,000 from the prior week’s revised 198,000. The figure was below economists’ expectations of 202,000, indicating that layoffs remain subdued and the labour market continues to show resilience.
Markets are forecasting that the U.S. economy added 88,000 jobs in July, following an increase of 57,000 in June.
SanDisk slides despite earnings beat
Technology stocks were set for a weaker start after SanDisk (NASDAQ:SNDK) dropped roughly 10% in pre-market trading.
The memory chip manufacturer reported quarterly results ahead of expectations, but investors focused instead on guidance that fell short of the market’s elevated expectations.
Wednesday’s rally loses momentum
Wall Street initially extended its recent gains on Wednesday before sellers emerged later in the session.
The Dow Jones Industrial Average closed up 263.24 points, or 0.5%, at 54,349.12. Meanwhile, the S&P 500 slipped 0.2% to 7,723.55 and the Nasdaq Composite lost 0.8% to finish at 26,363.44.
The pullback followed four consecutive sessions of gains that had pushed both the Dow and S&P 500 to record highs.
AI-related names remain under pressure
Investor sentiment toward AI-related companies weakened after SpaceX (NASDAQ:SPCX) reported higher-than-expected revenue but disclosed a sharp rise in capital expenditure, sending its shares down 13.6%.
Advanced Micro Devices (NASDAQ:AMD) also fell 7%, despite delivering stronger-than-expected quarterly earnings.
Disney and healthcare stocks provide support
Disney (NYSE:DIS) helped support the Dow after climbing 3.7% on stronger-than-expected quarterly results.
Amgen (NASDAQ:AMGN) advanced 4.6%, while Nvidia (NASDAQ:NVDA) gained 3.4%.
ADP points to softer hiring
Private payroll processor ADP reported that private-sector employment increased by 44,000 jobs in July, below economists’ forecasts of 75,000.
June’s figure was revised down to 95,000 from 98,000.
Energy weak, gold miners rally
Falling crude prices weighed on energy shares, with the NYSE Arca Oil Index declining 3% and the Philadelphia Oil Service Index falling 2.5%.
Gold miners outperformed as bullion prices strengthened, lifting the NYSE Arca Gold Bugs Index 7.6% to its highest close in more than a month.
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