S&P 500 futures pull back slightly from record ahead of economic data, Fed summit

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A trader works on the New York Stock Exchange (NYSE) in New York on August 20, 2021.

Andrew Kelly | Reuters

S&P 500 futures were lower on Wednesday after the benchmark surged above 4,500 for the first time in the previous session.

S&P 500 futures lost 0.1% and Nasdaq 100 futures lost 0.2%. The Dow Jones Industrial average futures were unchanged.

Weekly unemployment claims data is released Thursday at 8:30 a.m. ET. Economists polled by Dow Jones expect 350,000 Americans to register as unemployed last week, compared to 348,000 the previous week. Investors will also get the second estimate of GDP last quarter. Economic growth in the second quarter was estimated by the Dow Jones to be 6.7%, a slight upward correction from the previously reported annual increase of 6.5%.

The Federal Reserve’s much-anticipated Jackson Hole Symposium will be held virtually on Friday this year, with many central bank speakers expected to make remarks to the media starting Thursday. At the event, central bankers could share their plan to curb monetary stimulus.

Salesforce shares rose 2% in pre-trading hours after the software giant released second-quarter results and forecasts that beat analysts’ estimates. Ulta Beauty increased 5% due to strong results.

On Wednesday, the S&P 500 gained 0.22% to close on a record, led by stocks that are benefiting from the economic reopening such as airlines, cruise lines and financial companies. The 500-share average broke above 4,500 for the first time on Wednesday, but closed below that level. The benchmark is up 105% from its pandemic low.

The Nasdaq Composite rose 0.15% and also hit a record close. The Dow Jones Industrial Average rose 39 points.

The benchmark 10-year government bond yield rose as high as 1.352% on Wednesday as worries about slowing growth in the Delta variant eased, reaching its highest level since the beginning of the month when it returned as high as 1.364%.

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“The yield on 10-year government bonds has continued to rise in the last few days and has exploded in [Wednesday’s] act and send a strong message that the US Delta variant of Covid may be peaking, which should build confidence, resume economic reopening and stimulate investment flows towards small caps and cyclical stocks, “said Jim Paulsen, Chief Investment Strategist at the Leuthold Group.

Chairman Jerome Powell will make remarks at the Fed summit on Friday. In response to the pandemic, the Federal Reserve has bought at least $ 120 billion a month in bonds to curb longer-term interest rates and stimulate economic growth.

“Expect investors to keep an eye on the Fed symposium for the remainder of this week for comments on the rate hike or the timing of rate hikes,” Paulsen said. “Either unexpected comments from the Fed or a failure or success in scaling up to 4500 could add additional volatility to the equity and bond markets.”

Several companies reported quarterly earnings on Thursday, including Dell Technologies, Gap, HP and Abercrombie & Fitch.

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