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Dow futures edge lower; Disney results, PPI data in focus

Published 11/05/2023, 09:00 pm
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Investing.com -- U.S. stocks are seen opening in a muted fashion Thursday, with disappointing results from entertainment giant Disney puncturing lingering optimism generated by the previous session’s inflation data.

At 06:45 ET (10:45 GMT), the Dow Futures contract was down 8 points, or 0.1%, while S&P 500 Futures traded 8 points, or 0.2%, higher and Nasdaq 100 Futures climbed 30 points, or 0.2%.

The main indices closed largely higher Wednesday, with the tech-heavy Nasdaq Composite leading the way, gaining over 1%, while the broad-based S&P 500 rose 0.5%. The blue-chip Dow Jones Industrial Average underperformed, ending 30 points, or 0.1%, lower.

This generally optimistic tone followed the release of the latest U.S. inflation data, with consumer price growth easing marginally in April, helping bolster expectations that the Federal Reserve would pause its long-running interest rate hiking cycle at its next policy meeting in June.

The next test of that theory comes with the release of the April producer price index later in the session. This is expected to show a month-on-month uptick of 0.3% in April, while on an annual basis, the index is expected to rise 2.4%, a fall from the prior month, when the gauge slowed to its smallest year-on-year increase since January 2021.

Helping limit the gains is the uncertainty surrounding the country’s debt ceiling. U.S. Treasury Secretary Janet Yellen issued another warning if lawmakers fail to reach an agreement to lift the $31.4 trillion borrowing limit, saying a default on its debt obligations could lead to "dreadful consequences."

The lack of agreement has resulted in the cost of insuring against a U.S. default rising to its highest since early 2009.

On the earnings front, Dow-listed stock Walt Disney (NYSE:DIS) reported its largest-ever quarterly drop in subscribers to its flagship Disney+ streaming service after-hours Wednesday, with four million customers leaving the service in the January to March period. Its stock fell over 5% premarket.

Elsewhere, Sonos (NASDAQ:SONO) stock slumped by a quarter after the manufacturer of home sound systems cut its guidance for the second half of the year after posting a first-quarter loss.

On the flip side, Robinhood (NASDAQ:HOOD) stock rose 5% after the retail brokerage surpassed expectations for first-quarter revenue, and announced plans to offer 24-hour trading for five days a week.

Oil prices rose Thursday, bouncing after recent losses after stronger-than-expected fuel demand data from the United States, the world's top oil consumer. 

Official U.S. data from the Energy Information Administration showed that crude inventories rose by almost 3 million barrels last week. 

However, gasoline stocks fell by 3.2 million barrels, much more than the 1.2 million expected, while U.S. jet fuel demand rose to its highest level since December 2019, suggesting demand for transport fuels remains resilient in the U.S.

By 06:45 ET, U.S. crude futures traded 0.6% higher at $72.99 a barrel, while the Brent contract climbed 0.6% to $76.86.

Additionally, gold futures fell 0.2% to $2,032.95/oz, while EUR/USD traded 0.5% lower at 1.0922.

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