US stock index futures were trading early Thursday morning after the Dow closed at a record high.
Forward contracts linked to the Dow Jones Industrial Average scored 50 points. S&P 500 futures hovered around the flat line while Nasdaq traded 100 futures in negative areas.
The move comes after the Dow jumped 425 points on Wednesday to close a record high in a volatile session, dropping the average of 30 shares at a time by more than 110 points. The S&P 500 was up 1.1%, while the Nasdaq Composite was up 1%. Earlier in the session, the technically heavy index fell 1.3%.
Rising rates weighed the shares early in the session as the ten-year US Treasury yield was 1.4% higher and reached the highest level since February 2020. Higher rates may encourage investors to switch stocks and make bonds. Higher rates could also hit the growth-based technology sector particularly hard.
“Our basic case is that rates will continue to rise due to rising growth and inflation expectations and eventually the normalization of the Federal Reserve,” said Ryan Detrick, chief market strategist at LPL Financial. “We also believe that if rates move too fast, the Fed will intervene to ensure that rising rates do not become too restrictive and disrupt the stock markets or the real economy,” he said.
The yields came off their highs after Federal Reserve Chairman Jerome Powell continued the threat of inflation.
“It seems pretty clear to us that the price shift was driven by growing optimism about economic growth, and that prices are finally catching up with the ‘strong growth outlook in equities’,” said David Lefkowitz, head of US equities at UBS Global. said. Wealth management. “So investors should not be too worried.”
As for the data, the initial numbers for jobless claims will be announced Thursday at 8:30 a.m. ET, with economists interviewed by Dow Jones and expecting a pressure of 845,000. The U.S. Department of Commerce will also announce its second estimate for GDP in the fourth quarter at 8:30 p.m.
It will also be a busy day on the earnings front with a number of companies announcing quarterly results. Best Buy, Papa John’s and Domino’s Pizza are among the names on the deck before the opening bell. After the market closed, Salesforce.com, Beyond Meat, Etsy and Caesars Entertainment were among the names.
The new public enterprises, Airbnb and DoorDash, will also report their revenue on Thursday after the closing clock.
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