Investing.com-- U.S. stock index futures edged lower Thursday, handing back some of the previous session's record gains, ahead of more corporate earnings and important labor market data.
At 06:25 ET (11:25 GMT), Dow Jones Futures slipped 10 points, or 0.1%, S&P 500 Futures dropped 4 points, or 0.1%, and Nasdaq 100 Futures fell 25 points, or 0.1%.
The main Wall Street indexes finished at record highs on Wednesday, boosted by a strong rally in major technology stocks.
The broad-based S&P 500 rose 0.6%, the NASDAQ Composite rose 1.3%, and the Dow Jones Industrial Average ended up 0.7%, breaking through 45,000 for the first time ever.
Wall Street has been on a tear since Trump’s election victory in early-November, with analysts expecting more gains as 2024 draws to a close.
Powell flags strength in the economy; Payrolls awaited
Investors were also encouraged by Federal Reserve Chair Jerome Powell flagging strength in the US economy, which spurred flows into more economically sensitive sectors.
Powell said the economy was in a better place than as it appeared in September when the Fed began cutting interest rates, allowing the Fed to be more cautious in considering further easing. Powell also flagged progress towards bringing down inflation, although his comments likely indicated support for a slower pace of rate cuts.
His comments are likely his last public statements before the Fed meets later in December, when the central bank is widely expected to cut interest rates by 25 basis points.
But markets are uncertain over the longer term outlook, especially given that resilience in the U.S. economy could keep inflation sticky. President-elect Donald Trump’s protectionist trade policies are also expected to underpin inflation in the long term.
Still, investors latched on to the prospect of a stronger economy, sparking broad-based gains across Wall Street. Investors were also relieved by Powell not downplaying the prospect of a December cut.
Jobless claims ahead
Economic data due for release Thursday includes the weekly jobless claims numbers, following on from disappointing private sector jobs growth.
However, the main focus is on the upcoming nonfarm payrolls data for November, due on Friday. The reading is expected to show resilience in the labor market and is likely to factor into the outlook for U.S. interest rates.
Goldman Sachs strategists continue to forecast consecutive 25 basis-point rate cuts in December, January, and March, followed by additional reductions in June and September.
However, they note that recent remarks from Federal Reserve officials have increased the likelihood that the Federal Open Market Committee might slow the pace of rate cuts sooner than previously expected, possibly as early as the December or January meetings.
Retail earnings continue
There are more quarterly earnings to digest Wednesday, from the likes of Dollar General (NYSE:DG), Kroger (NYSE:KR), Ulta Beauty (NASDAQ:ULTA) and Hewlett Packard Enterprise (NYSE:HPE).
Elsewhere, American Eagle Outfitters (NYSE:AEO) stock slumped 16% premarket after the retailer cut its target for annual comparable sales growth, in signs that apparel demand could be erratic during the critical holiday season.
Five Below (NASDAQ:FIVE) stock rose 14% after the discount retailer reported better-than-expected third quarter results, raised its full-year outlook and announced the appointment of a new CEO.
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