Dow futures rise 195 pts; jobless claims, GDP data due

By Peter Nurse

Investing.com — U.S. stocks are seen opening higher Thursday, adding to the gains from the previous session as fears about the banking system fade and investors try to gauge the Federal Reserve’s future plans.

At 07:00 ET (11:00 GMT), the Dow Futures contract was up 195 points, or 0.6%, S&P 500 Futures traded 22 points, or 0.6%, higher and Nasdaq 100 Futures climbed 60 points, or 0.5%.

The main indices closed with strong gains Wednesday, with the tech sector leading the way on rising expectations the Federal Reserve may pause its rate-hiking cycle when its policymakers next meet in May.

The blue chip Dow Jones Industrial Average closed over 300 points, or 1%, higher, while the broad-based S&P 500 ended up 1.4%. The tech-heavy Nasdaq Composite gained 1.8%, putting it on course for a 13% gain by the end of the quarter, which would be the index’s best advance since the fourth quarter of 2020.

While the tensions surrounding the banking sector appear to be easing, investors are still worried that the pressure on lenders this month will translate into a pullback in lending, likely hitting economic growth going forward.

With this in mind, investors are starting to factor in the Fed pausing its battle against inflation, although this view could be affected by the release Friday of the U.S. central bank’s favorite gauge of inflation, the core PCE prices index.

Ahead of that, the final reading for the fourth quarter gross domestic product is expected to show growth of 2.7% from the prior quarter, while weekly initial jobless claims are expected to be 196,000, which would be up from 191,000 the prior week. Both releases are due at 08:30 ET (12:30 GMT).

Additionally, Boston Federal Reserve President Susan Collins, Richmond Fed President Thomas Barkin and Minneapolis Fed President Neel Kashkari are all scheduled to speak later in the session.

In corporate news, Alibaba (NYSE:BABA) provided more details of its future plans, with the CEO of China’s biggest Internet platform company, Daniel Zhang, saying it will sell off non-core assets and will consider giving up majority control of the six operating companies that it is creating.

RH (NYSE:RH) stock fell more than 6% premarket after the home furnishing retailer reported disappointing quarterly results, and continued to warn of a challenging backdrop amid weakness in the housing market.

Oil prices edged higher Thursday, continuing the week’s positive tone after U.S. crude oil inventories fell by 7.5 million barrels last week according to official data from the U.S. Energy Information Administration, the biggest draw since late November.

Additionally, disruptions in Kurdish oil shipments have cut out about 450,000 barrels per day, or 0.5% of daily global supply, tightening the global supply situation.

By 07:00 ET, U.S. crude futures traded 1.1% higher at $73.77 a barrel, while the Brent contract climbed 0.9% to $78.32.

Additionally, gold futures rose 0.2% to $1,988.15/oz, while EUR/USD traded 0.4% higher at 1.0882.