By Peter Nurse
Investing.com - U.S. stocks are set to edge lower at the open Thursday, with investors wary ahead of the latest employment data, the day after the Federal Reserve expressed concerns about the state of the U.S. recovery. Losses are limited, however, amid positive comments regarding the U.S.-China relationship.
At 7 AM ET (1100 GMT), S&P 500 Futures traded 14 points, or 0.4%, lower, the Dow Futures contract fell 85 points, or 0.3%, while Nasdaq 100 Futures dropped 64 points, or 0.6%.
The S&P 500 fell 0.4% to close Wednesday at 3,374.85, after surging above its previous all-time intraday of 3,393.52 earlier in the session. The Dow Jones Industrial Average slipped 0.3%, while the Nasdaq Composite fell 0.6%.
The indexes were weighed by the U.S. central bank indicating that the path to economic recovery for the U.S. economy from the Covid-19 outbreak remains highly uncertain.
With this in mind, investors will pay particular attention to the weekly initial jobless claims data, at 8:30 AM ET (1230 GMT), for the latest update on the health of the U.S. labor market.
After falling below one million last week for the first time since the start of the Covid-19 pandemic in March, this week’s release is expected to have fallen further to a new five-month low of 925,000.
Continuing claims, which are reported with a one-week time lag, are expected to fall by nearly half a million to 15.00 million.
Helping the tone Thursday were comments from the Chinese commerce ministry, stating that the U.S. and China have agreed to meet soon to review the progress of their “phase one” trade deal.
The postponement of talks over the weekend sparked fears that this deal, which paused a damaging trade war between the world’s two largest economies, could fall apart.
The retail sector is scheduled to see earnings from warehouse chain BJs Wholesale Club (NYSE:BJ) and off-price retailer Ross Stores (NASDAQ:ROST). There are also updates from Chinese e-commerce giant Alibaba (NYSE:BABA), as well as cosmetics group Estee Lauder (NYSE:EL) and biotech startup Sorrento Therapeutics (NASDAQ:SRNE).
Oil prices weakened, as the Fed minutes amounted to a warning about the recovery in demand, while U.S. oil inventories dropped for a fourth straight week, but by only 1.6 million barrels, less than expected.
Members of OPEC+, a group of major oil producers, also warned Wednesday that the global rebound in demand was taking place at a slower pace than expected, and that a second wave of the Covid-19 virus could do even more damage.
U.S. crude futures traded 1% lower at $42.70 a barrel, while the international benchmark Brent contract fell 1% to $44.91.
Elsewhere, gold futures fell 1.8% to $1,935.45/oz, retreating after the dollar rebounded on the back of the Fed’s comments. EUR/USD traded flat at 1.1833 after a similar sharp drop.