(Reuters) – U.S. stock index futures fell on Thursday as markets awaited data for insights on the economic outlook and the likelihood of further interest rate cuts by the Federal Reserve, while watching for a possible escalation of hostilities in the Middle East.
Wall Street’s three main indexes closed flat last session after a private survey showed the labor market was not in sharp decline.
Nevertheless, caution prevailed as investors considered the scale of Israel’s and the United States’ response to Iran’s recent attack on Israel. The CBOE volatility index, Wall Street’s fear gauge, hovered at its highest point in more than three weeks at 19.96.
At the top of the day’s agenda is a report expected to show that the number of Americans filing for unemployment benefits in the week ending September 28 was 220,000, up from 218,000 the week before. The most important figures on non-farm payrolls will be released on Friday.
Also available is the Institute for Supply Management’s research on service sector activity, which makes up the largest share of the U.S. economy. For the month of September, the index is expected to remain in expansion territory at 51.7.
At 5:36 a.m. ET, the Dow E-minis were down 124 points, or 0.29%, the S&P 500 E-minis were down 17.25 points, or 0.30%, and the Nasdaq 100 E-minis fell by 84.5 points, or 0.42%.
U.S. stocks have risen for most of the year, with the benchmark S&P 500 confirming a bull rally and posting gains in eight of the previous nine months on expectations of lower borrowing costs.
Technology stocks have led the charge on the prospect of their profits being boosted by the integration of artificial intelligence.
Investors will also assess comments from Fed policymakers Raphael Bostic and Neel Kashkari later in the day. According to CME Group’s FedWatch Tool, the probability that the US central bank will cut rates by 25 basis points at its November meeting is 63.9%, up from 50.7% a week ago.
Meanwhile, a workers’ strike on the East Coast and Gulf Coast entered its third day. Economists at Morgan Stanley said a prolonged disruption could raise consumer prices, with food prices likely to be the first to respond.
Among pre-market movers, oil stocks such as Occidental Petroleum and Exxon Mobil were flat, although crude prices rose more than 1% as investors factored in potential supply disruptions in the Middle East. [O/R]
Levi Strauss fell 11.3% after the company said it was considering a sale of its underperforming Dockers brand and forecast fourth-quarter revenue below expectations.
Tesla fell 1.7% daily after reporting a smaller-than-expected increase in third-quarter deliveries. The EV maker also discontinued its most affordable Model 3 compact sedan in the US
(Reporting by Johann M Cherian in Bengaluru; Editing by Pooja Desai)
