Good morning traders!
The S&P 500 ($SPY) is trading below yesterday’s close. Let’s get into it…
Stock futures took a hit on Thursday, marking a continuation of losses for the week, as Treasury yields reached multi-year highs. This decline marks the third consecutive negative session for all three major indexes. The drop comes in the wake of the Federal Reserve’s decision to maintain higher interest rates for an extended period.
Weekly jobless claims fell by 20,000 to 201,000 for the week ending September 16, significantly lower than the 225,000 claims economists had anticipated. This is the lowest level of new unemployment claims since January. The 2-year yield also reached its highest level since 2007, topping 5.19% after the release of the jobs data.
On Wednesday, the Federal Reserve announced its decision to leave interest rates unchanged but signaled another rate hike before the year’s end. The central bank also indicated fewer rate cuts for the next year, essentially suggesting that higher rates would be maintained for a longer period due to persistent inflation. Fed Chair Jerome Powell stated that although a soft landing for the economy is possible, it’s not the most likely scenario. Market analysts interpret this as a sign that the economy has significant momentum requiring higher rates for an extended period.
In the news, tech stocks, including Tesla, Alphabet, Meta Platforms, and Nvidia, led the losses this week as investors reconsidered growth-oriented stocks in a high-interest-rate environment. Marketing automation firm Klaviyo, which recently went public, also saw its stock slip nearly 2% in premarket trading on Thursday. On a positive note, FedEx bucked the trend by gaining 5% after posting adjusted earnings that exceeded analysts’ expectations.
Thursday Economic Events:
Jobless Claims 8:30am ET – High Volatility Expected
Philly Fed Mfg Index 8:30am ET – High Volatility Expected
Current Accounts 8:30am ET
Existing Home Sales 10:00am ET – High Volatility Expected
Leading Indicators 10:00am ET
EIA Natural Gas Report 10:30am ET
Fed Speaker Scheduled:
No Fed Speakers Scheduled
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