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Dow futures retreat; labor market data in focus

Published 06/07/2023, 09:36 pm
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Investing.com -- U.S. stock futures fell Thursday, continuing the previous session’s weakness after the minutes of the last Federal Reserve meeting indicated more monetary tightening ahead.

By 06:50 ET (10:50 GMT), the Dow Futures contract was down 135 points or 0.4%, S&P 500 Futures traded 19 points or 0.4% lower, and Nasdaq 100 Futures dropped 70 points or 0.5%.

The major indices recorded minor losses Wednesday, with the blue-chip Dow Jones Industrial Average closing 130 points or 0.4% lower, and both the broad-based S&P 500 and the tech-heavy Nasdaq Composite losing 0.2%.

Fed minutes hit at further hikes

The key takeaways from the minutes of the Fed's June meeting, released Wednesday, are that some of the policymakers didn't agree with the decision to pause the year-long hiking cycle, but "almost all" noted that further rate increases will likely be needed as inflation remains "unacceptably high."

In the wake of the minutes, Investing.com's Fed Rate Monitor Tool put the chance of a hike at the meeting later in July at more than 90%, and there remains a reasonable chance that another will follow, especially as Fed Chairman Jerome Powell has argued that monetary policy isn't restrictive enough.

Labor market in focus

The impact of this monetary policy on the crucial jobs market will be made apparent shortly, as there are no fewer than four U.S. labor market reports due in the next 48 hours, culminating with Friday's U.S. nonfarm payrolls.

The weekly initial jobless claims are expected to show a small increase to 245,000, from 239,000 last week; the ADP private payrolls report is expected to show companies added 228,000 jobs in June, a slower pace than the prior month; and the JOLTs report on job openings is expected to report 9.9 million openings as of the end of May, down from the previous month.

Yellen arrives in China for talks

Elsewhere, the U.S. Treasury Secretary Janet Yellen has arrived in China at the start of a three-day visit, in an attempt to thaw recently frosty relations between the two nations.

China introduced export controls on key chipmaking materials earlier this week, with the chip-tech trade the latest flashpoint in the rivalry.

Meta unveils Threads social media platform

In corporate news, Facebook-owner Meta Platforms (NASDAQ:META) has officially unveiled Threads, a social media platform for short-text posts that is widely seen as a competitor to Elon Musk's Twitter.

In its first seven hours, Threads, which can be accessed via Meta's popular photo-sharing app Instagram, garnered some 10 million sign-ups, according to chief executive Mark Zuckerberg.

Crude edges higher after U.S. stockpiles draw

Oil prices edged higher Thursday, helped by falling U.S. crude stockpiles, boosting hopes that U.S. oil demand is increasing during the travel-heavy summer season.

Data released Wednesday by the industry group American Petroleum Institute showed that U.S. oil inventories shrank nearly 4.4 million barrels in the week to June 30, far more than expectations for a draw of 1.8 million barrels.

Official numbers from the Energy Information Administration are due later in the session.

By 06:50 ET, the Brent contract climbed 0.1% to $76.69, while U.S. crude futures traded 0.2% higher at $71.92 a barrel.

Additionally, gold futures rose 0.2% to $1,930.75/oz, while EUR/USD traded 0.4% higher at 1.0889.

(Oliver Gray contributed to this item.)

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