By Peter Nurse
Investing.com – US stocks are expected to open on Thursday, stabilizing after the steep decline in the previous session as investors digest the Federal Reserve’s increasingly hawkish stance.
At 7 a.m. (1200 GMT), the contract was up 100 points, or 0.3%, traded 2 points, or 0.1%, higher, as it fell 60 points , or 0.4%.
Major Wall Street indices closed sharply lower on Wednesday after the Federal Reserve’s December meeting signaled the possibility of a faster-than-expected US rate hike and a withdrawal of stimulus measures.
The blue chips fell nearly 400 points, or 1.1%, after hitting an intraday high earlier, while the broad fell 1.9%. The, an index that includes many growth-sensitive stocks, suffered the most, falling 3.3%, its biggest one-day loss since February.
“So now the Fed wants to end QE sooner, wants to raise rates sooner and shrink the balance sheet,” said Michael Kramer, founder of Mott Capital Management, “The market can’t agree with this, and it shouldn’t be. Valuations across the market are too high to support such monetary tightening. “
Fed policymakers have indicated that a “very tight” labor market is a key factor leading them to raise rates sooner than expected. soared last month, and attention now turns to weekly data due later Thursday, ahead of Friday’s key report.
In business news, the retail sector is expected to be the center of attention after Reuters reported foot traffic increased to Target (NYSE 🙂 during the recent holiday season compared to two years earlier, while visits to Walmart (NYSE 🙂 and Best buy (NYSE 🙂 stores have generally plummeted.
Additionally, there will be quarterly earnings reports from Walgreens Boots Alliance (NASDAQ 🙂 and Bed Bath & Beyond (NASDAQ 🙂 before the bell on Thursday.
Oil prices firmed Thursday, helped by escalating unrest at oil producer Kazakhstan and supply disruptions in Libya.
Russia sent paratroopers to Kazakhstan on Thursday to quell a nationwide uprising. Although there is no indication that oil production has been affected so far, the former Soviet state currently produces 1.6 million barrels of oil per day.
In addition, oil production is down by more than 500,000 barrels per day in Libya due to pipeline maintenance and oil field closures.
Crude prices had weakened on Wednesday after data from the US Energy Information Administration showed an increase of more than 10 million barrels, the largest weekly build since April 2020, suggesting that the American public is reluctant to travel while as Covid cases increase.
As of 7 a.m. ET, futures were trading up 1.2% to $ 78.75 a barrel, while the contract was up 1.1% to $ 81.72. Both contracts hit their highest levels since late November.
Additionally, it fell 1.5% to $ 1,797.30 / oz, as it traded slightly lower at 1.1308.