U.S. equity futures are pointing to a stronger start on Thursday, suggesting markets may rebound after ending Wednesday’s uneven session slightly lower.
Futures extended their advance following the latest weekly jobless claims report from the Labor Department, which showed a smaller-than-expected decline in new applications for unemployment benefits.
Initial claims fell by 5,000 to 227,000 from a revised 232,000 the prior week. Economists had forecast a drop to 220,000 from the originally reported 231,000.
With claims still running at relatively elevated levels, the figures may soften the impact of Wednesday’s robust January payrolls report.
That employment data showed stronger-than-anticipated job creation, reinforcing the resilience of the U.S. labor market. However, it also dampened expectations for near-term interest rate cuts from the Federal Reserve.
Market participants are now looking ahead to Friday’s consumer price index release, which could play a pivotal role in shaping rate expectations.
“Forecasts suggest the critical core CPI measure could ease to around 2.5%, marking a near five-year low,” said Daniela Hathorn, Senior Market Analyst at Capital.com. “If inflation comes in line with — or ideally below — expectations, the strength of the labor market may become secondary.”
She added, “A softer inflation print would keep rate cuts firmly priced in and could restore upward momentum in risk assets.”
On Wednesday, stocks initially climbed after the payrolls data but soon lost traction. The major indices spent much of the day fluctuating around the flatline before finishing modestly lower.
The Dow Jones Industrial Average slipped 66.74 points, or 0.1%, to 50,121.40. The Nasdaq Composite declined 36.01 points, or 0.2%, to 23,066.47, while the S&P 500 edged down 0.34 points to 6,941.47.
According to the Labor Department, nonfarm payrolls rose by 130,000 in January, following a downwardly revised 48,000 increase in December. Economists had expected a gain of 70,000 jobs.
The unemployment rate ticked down to 4.3% from 4.4%, defying forecasts for no change.
The report also featured a substantial downward revision to 2025 job growth, with employment gains adjusted to 181,000 from 584,000 previously reported.
“One big takeaway from today’s nonfarm payroll report is the 2025 average monthly gain in payrolls was 15,000,” said Jeffrey Roach, Chief Economist for LPL Financial. “Labor demand came to a standstill last year.”
Sector performance was mixed. Energy stocks outperformed alongside higher crude prices, with the Philadelphia Oil Service Index climbing 3.1% and the NYSE Arca Oil Index advancing 2.8%.
Gold stocks also benefited from rising bullion prices, lifting the NYSE Arca Gold Bugs Index by 2.6%.
Semiconductor, computer hardware, and natural gas shares posted gains, while airlines, software firms, and brokerage stocks lagged.
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