The major U.S. index futures are currently pointing to a roughly flat open on Thursday, with stocks likely to extend the lackluster performance seen in the previous session.
Traders may be reluctant to make significant moves as they digest the latest U.S. economic data and look ahead to a speech by Federal Reserve Chair Jerome Powell later this afternoon.
The Labor Department released a report this morning showing first-time claims for U.S. unemployment benefits unexpectedly edged lower in the week ended November 9th.
The report said initial jobless claims slipped to 217,000, a decrease of 4,000 from the previous week’s unrevised level of 221,000. Economists had expected jobless claims to inch up to 223,000.
The unexpected decline pulled jobless claims down to their lowest level since hitting 216,000 in the week ended May 18th.
After yesterday’s consumer price inflation data matched expectations, the Labor Department also released a separate report showing producer prices in the U.S. also increased in line with economist estimates in the month of October.
The Labor Department said its producer price index for final demand rose by 0.2 percent in October following a revised 0.1 percent uptick in September.
Economists had expected producer prices to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.
Meanwhile, the report said the annual rate of growth by producer prices accelerated to 2.4 percent in October from an upwardly revised 1.9 percent in September.
The annual rate of producer price growth was expected to accelerate to 2.3 percent from the 1.8 percent originally reported for the previous month.
The slightly faster than expected annual price growth combined with the jobless claims data showing continued strength in the labor market may add to recent uncertainty about the outlook for interest rates.
While the Fed is still widely expected to lower interest rates by a quarter point next month, there is some concern sticky inflation will lead the central bank to slow the pace of its rate cuts in early 2025.
Stocks showed a lack of direction over the course of the trading day on Wednesday, with the major averages bouncing back and forth across the unchanged line following the pullback seen during Tuesday’s session.
The major averages eventually ended the day narrowly mixed. While the tech-heavy Nasdaq dipped 50.66 points or 0.3 percent to 19,230.74, the S&P 500 crept up 1.39 points or less than a tenth of a percent to 5,985.38 and the Dow inched up 47.21 points or 0.1 percent to 43,958.19.
The choppy trading on Wall Street came following the release of closely watched consumer price inflation data that came in line with economist estimates.
The Labor Department said its consumer price index crept up by 0.2 percent in October, matching the upticks seen in each of the three previous months as well as expectations.
The report also said the annual rate of consumer price growth accelerated to 2.6 percent in October from 2.4 percent in September. The faster growth also came in line with economist estimates.
Excluding food and energy prices, core consumer prices climbed by 0.3 percent in October, matching the increases seen in each of the two previous months along with expectations.
The annual rate of core consumer price growth was unchanged from the previous month at 3.3 percent, which was also in line with estimates.
While the data increased confidence the Federal Reserve will continue lowering interest rates next month, inflation remaining somewhat sticky led to uncertainty about the likelihood of future rate cuts.
“The 2.6% year-over-year print, while expected, may keep the Fed mindful from declaring victory over its campaign to quell inflation,” said Quincy Krosby, Chief Global Strategist for LPL Financial.
Airline stocks saw substantial weakness on the day, with the NYSE Arca Airline Index plummeting by 7.3 percent. The index continued to give back ground after reaching its best closing level in over a year on Monday.
A nosedive by shares of Spirit Airlines (NYSE:SAVE) weigh on the sector, with the discount airline plunging by 59.3 percent after a report from the Wall Street Journal said Spirit is preparing to file for bankruptcy protection after merger talks with Frontier Airlines (NASDAQ:ULCC) broke down.
Significant weakness was also visible among semiconductor stocks, as reflected by the 2.0 percent slump by the Philadelphia Semiconductor Index.
Oil service, steel and computer hardware stocks also saw considerable weakness, while oil producer and retail stocks showed strong moves to the upside.