U.S. stock index futures are pointing to a slightly lower open on Thursday, suggesting equities may come under pressure after a mixed finish in the previous session.
The softer tone follows comments from President Donald Trump calling for a sharp increase in U.S. military spending to $1.5 trillion by 2027.
“This will allow us to build the ‘Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe,” Trump said in a post on Truth Social.
While the proposal is seen as supportive for defence-related stocks, it has also raised concerns about the implications for government finances.
“Watch the bond market closely as Trump’s proposal to radically increase defense spending could put even more pressure on the already sky-high U.S. national debt,” said Russ Mould, investment director at AJ Bell.
“While Trump insists any extra spending would be paid for by tariffs, bond markets might not be as convinced,” he added. “Equity markets are already looking a bit doubtful, with futures prices implying a red day for Wall Street.”
Trading volumes could remain relatively light, however, as investors look ahead to Friday’s closely watched U.S. employment report from the Labor Department.
Economists expect nonfarm payrolls to rise by 60,000 in December, following a gain of 64,000 in November. The unemployment rate is forecast to edge lower to 4.5% from 4.6%.
Ahead of the payrolls release, data published earlier Thursday showed initial claims for U.S. unemployment benefits rose by slightly less than anticipated in the week ended January 3.
The Labor Department reported that first-time jobless claims increased to 208,000, up 8,000 from the prior week’s revised level of 200,000. Economists had expected claims to rise to 210,000 from the 199,000 originally reported for the previous week.
U.S. stocks were volatile on Wednesday before closing the relatively muted session mixed.
The Dow Jones Industrial Average and the S&P 500 retreated after starting the first full trading week of the year on a positive note, while the technology-heavy Nasdaq managed a small gain.
The Nasdaq added 37.10 points, or 0.2%, to finish at 23,584.27. In contrast, the S&P 500 fell 23.89 points, or 0.3%, to 6,920.93, and the Dow slid 466.00 points, or 0.9%, to 48,996.08.
The uneven trading reflected a pause by investors after recent market strength pushed both the Dow and the S&P 500 to record closing highs on Tuesday.
Participants were also digesting fresh economic data, including figures from payroll processor ADP showing private-sector employment increased by less than expected in December.
ADP reported that private employment rose by 41,000 jobs last month, following a revised decline of 29,000 in November. Economists had been looking for a gain of 47,000 jobs, compared with an originally reported drop of 32,000 the month before.
Separately, Labor Department data showed U.S. job openings fell by more than forecast in November.
Meanwhile, the Institute for Supply Management reported an unexpected pickup in U.S. services sector activity in December. The ISM services PMI rose to 54.4 from 52.6 in November, defying expectations for a slight dip to 52.3. A reading above 50 signals expansion, and December’s figure marked the highest level since October 2024.
Sector performance was mixed. Housing-related stocks fell sharply, dragging the Philadelphia Housing Sector Index down 2.6%.
Utilities, which are sensitive to interest-rate expectations, also came under heavy pressure, with the Dow Jones Utility Average sliding 2.3% to its lowest closing level in six months.
Telecoms, financials and oil services stocks also weakened notably, while pharmaceutical, biotechnology and software shares posted solid gains.