Skip to main content

Stocks Set for Mixed Open After Fed-Triggered Nasdaq Rout

U.S. stock futures point to another mixed open amid expectations the Federal Reserve will pull back on economic stimulus sooner than expected to tamp down inflation.

U.S. stock futures were mixed Thursday morning, with the Dow Jones Industrial Average and S&P 500 poised for a higher open and the tech-heavy Nasdaq on track for more losses amid expectations the Federal Reserve will pull back on economic stimulus sooner than expected to tamp down inflation.

Futures contracts tied to the Dow Jones Industrial Average were indicating a 75-point opening gain, while those linked to the S&P 500 were pricing a muted 0.25-point increase. Futures tied to the Nasdaq Composite, meantime, were suggesting a 60-plus-point drop at the start of trading after after the tech-heavy index posted its biggest one-day drop since last February. Benchmark 10-year Treasury note yields were trading up slightly at 1.737%.

In commodity markets, Brent crude, the international oil benchmark, was up 1.29% at  $82.09 a barrel. Oil prices surged earlier in the week after the Organization of the Petroleum Exporting Countries and a coalition of Russia-led oil producers agreed to continue pumping more crude.

Minutes from the Federal Reserve’s December meeting released on Wednesday revealed the central bank is getting ready to remove its economic help at a faster pace than expected -- a reveal that sent stock price tumbling. Officials discussed reducing the Fed’s balance sheet in another move to dial back its pandemic-era easy monetary policy.

“Almost all participants agreed that it would likely be appropriate to initiate balance sheet runoff at some point after the first increase in the target range for the federal funds rate,” the minutes said.

Energy shares helped boost the market in early action as crude prices rose 1.5%. Marathon Oil  (MRO) - Get Marathon Oil Corporation Report gained 2.6%, Occidental Petroleum  (OXY) - Get Occidental Petroleum Corporation Report was up 2.2% and ExxonMobil  (XOM) - Get Exxon Mobil Corporation Report rose 1.3%.

TheStreet Recommends

Energy Expert: US Oil Output Will Bounce Back in 2022

Rate-sensitive stocks also were also higher following the release of Fed officials' discussions about the direction of the economy and interest rates last month.

Bank of America  (BAC) - Get Bank of America Corp Report saw its shares increase 1.5% premarket and Citigroup  (C) - Get Citigroup Inc. Report rose 1.4% and Wells Fargo  (WFC) - Get Wells Fargo & Company Report gained 1.3%.

Other specific stocks garnering attention on Thursday included drugmaker Pfizer  (PFE) - Get Pfizer Inc. Report, which is expected to release a data update on how its Covid-19 vaccine helps protect children under the age of five.

Investors also were awaiting quarterly earnings reports from Walgreens Boots Alliance  (WBA) - Get Walgreens Boots Alliance Inc Report and Bed Bath & Beyond  (BBBY) - Get Bed Bath & Beyond Inc. Report, both of which will be released before the opening bell Thursday.

On the data front, the weekly jobless claims report is slated for released Thursday morning. Economists surveyed by FactSet expect that claims totaled 195,000 for the week ended Jan. 1. Trade balance data is also due, with economists looking for the deficit in goods and services to total $81.5 billion.

The releases come a day ahead of the Labor Department’s nonfarm payrolls report, which is expected to show that the economy added 422,000 jobs in December. That number may be conservative, however, after payroll processing firm ADP reported Wednesday that companies added a much higher-than-expected 807,000 positions last month.