Dow Futures 285 Pts Lower; Fed Minutes, Robinhood in Focus
By Peter Nurse
Investing.com -- U.S. stocks are seen opening sharply lower Thursday, continuing the previous session’s selloff after the minutes of the last Federal Reserve meeting pointed to an early start to the tapering of its monetary stimulus.
At 7 AM ET (1100 GMT), the Dow Futures contract was down 285 points, or 0.8%, S&P 500 Futures traded 35 points, or 0.8%, lower, while Nasdaq 100 Futures dropped 90 points, or 0.6%.
The major indices posted hefty losses Wednesday, with the blue-chip Dow Jones Industrial Average dropping over 380 points, or 1.1%, the broad-based S&P 500 falling over 1%, and the tech-heavy Nasdaq Composite ending down 0.9%.
The catalyst for these losses, which are set to continue Thursday, was the release of the minutes from the July Fed meeting on Wednesday, which showed the policymakers advanced plans to pull back the pace of their monthly asset purchases before the end of 2021 if the economy continued to improve as expected.
This meeting occurred before August’s bumper nonfarm payrolls release, and has raised expectations that Fed chair Jerome Powell will announce more details of the central bank’s tapering plan at the Jackson Hole symposium at the end of next week.
Ahead of that, the weekly initial jobless claims data are due at 8:30 AM ET (1230 GMT), and are expected to show a gradually improving U.S. labor market. The Philadelphia Fed manufacturing index for August is due at the same time, and is expected to show a small improvement from July.
There are more earnings from the retail sector due Thursday, including quarterly results from department stores Kohls (NYSE:KSS) and Macy’s (NYSE:M) as well as numbers from Tapestry (NYSE:TPR), the parent of Coach , Kate Spade and Stuart Weitzman, and BJs Wholesale Club Holdings Inc (NYSE:BJ).
Robinhood (NASDAQ:HOOD) will also be in the spotlight after the trading app reported a net loss of $502 million in its first earnings report as a public company, even as its revenue more than doubled in the second quarter.
Nvidia (NASDAQ:NVDA) will also be in focus after the chip giant beat quarterly estimates, benefiting from booming demand for chips for graphics and artificial intelligence.
Elsewhere, oil prices fell Thursday, as a surprise increase in U.S. gasoline inventories suggested the spread of the delta coronavirus variant was weighing on fuel demand.
The U.S. Energy Information Administration reported late Wednesday a draw in crude oil supplies of over 3 million barrels in the week to Aug. 13, but it was the 696,000-barrel build in gasoline supplies, the first increase in more than a month, that had the biggest impact on sentiment.
By 7 AM ET, U.S. crude futures traded 3.6% lower at $62.84 a barrel, falling below $65 for the first time since May, while the Brent contract fell 3.3% to $66.01.
Additionally, gold futures rose 0.4% to $1,791.95/oz, while EUR/USD traded 0.1% lower at 1.1696.
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