U.S. Stocks May Show A Lack Of Direction In Early Trading

Following the steep drop seen over the two previous sessions, stocks may show a lack of direction in early trading on Thursday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures up by just 29 points.

Traders may be reluctant to make significant amid a continued focus on activity in the bond markets, which has been a key driver of trading in recent sessions.

The yields on ten-year notes and thirty-year bonds are currently edging higher, extending the rebound seen in the previous session.

The strong upward move by yields in recent weeks has led to concerns about inflation and the possibility of higher interest rates.

Later in the day, Federal Reserve Chair Jerome Powell is due to have a conversation on the U.S. economy at The Wall Street Journal Jobs Summit.

Traders are likely to keep a close eye on Powell’s remarks for any comments about the recent increase in yields and the outlook for monetary policy.

Powell has repeatedly sought to assure investors that the Fed intends to maintain ultra-easy monetary policy for the foreseeable future as the economy recovers from the coronavirus pandemic.

On the economic front, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended February 27th.

The report said initial jobless claims inched up to 745,000, an increase of 9,000 from the previous week’s revised level of 736,000.

Economists had expected jobless claims to rise to 750,000 from the 730,000 originally reported for the previous week.

Not long after the start of trading, the Commerce Department is scheduled to release its report on new orders for manufactured goods in the month of January. Economists expect factory orders to surge up by 2.1 percent.

Stocks moved mostly lower over the course of the trading day on Wednesday, extending the pullback seen during trading on Tuesday. The tech-heavy Nasdaq showed another particularly steep drop, tumbling to its lowest closing level in nearly two months.

The major averages saw further downside going into the close, ending the session at their worst levels of the day. The Nasdaq plunged 361.04 points or 2.7 percent to 12,997.75, the S&P 500 slumped 50.57 points or 1.3 percent to 3,819.72 and the Dow fell 121.43 points or 0.4 percent to 31,270.09.

In overseas trading, stock markets across the Asia-Pacific region moved notably lower during trading on Thursday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both tumbled by 2.1 percent.

The major European markets have shown more modest moves to the downside on the day. While the U.K.’s FTSE 100 Index is down by 0.4 percent, the German DAX Index is down by 0.2 percent and the French CAC 40 Index is down by 0.1 percent.

In commodities trading, crude oil futures are climbing $0.52 to $61.80 a barrel after jumping $1.53 to $61.28 a barrel on Wednesday. Meanwhile, after slumping $17.80 to $1,715.80 an ounce in the previous session, gold futures are slipping $2.30 to $1,713.50 an ounce.

On the currency front, the U.S. dollar is trading at 107.44 yen versus the 107.01 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.2028 compared to yesterday’s $1.2063.

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