U.S. stock indexes were set to open lower on Thursday as a rally fueled by optimism over an economic rebound from a coronavirus-led downturn ran out of steam even with weekly jobless claims dipping below 2 million for the first time since mid-March.
Wall Street’s main indexes have rebounded in the past few sessions, with the tech-heavy Nasdaq index (IXIC) now 1.4% away from surpassing an all-time closing high hit in February.
“The market is due for a pause,” said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland, Ohio.
“It’s really important to realize that U.S. equity investors have been given a great gift in the middle of what is probably the deepest recession in 80 years,” he said, referring to the strong run for Wall Street since late-March.
A report from the Labor Department showed new claims for state unemployment benefits totaled 1.877 million for the week ended May 30, down from 2.126 million in the prior week. Economists polled by Reuters had forecast 1.8 million initial claims in the latest week.
The focus will now shift to the closely watched employment report for May, due Friday, which is expected to show unemployment rate rocketing to 19.8%, a post-World War Two record.
Meanwhile, U.S.-China tensions continued to simmer as Hong Kong’s Legislative Council passed a bill that would criminalize disrespect of China’s national anthem, a move seen as the latest sign of Beijing’s tightening grip on the city.
The nationwide protests over the death of an unarmed black man in police custody dwindled overnight into early Thursday after prosecutors leveled new charges against four Minneapolis policemen implicated in the killing.
At 8:34 a.m. ET, Dow e-minis <1YMcv1> were down 115 points, or 0.44%. S&P 500 e-minis were down 17.25 points, or 0.55% and Nasdaq 100 e-minis were down 25.75 points, or 0.27%.
American Airlines Group Inc (O:AAL) rose 8.7% premarket after the airline revealed plans to fly more than 55% of its July 2019 domestic capacity and boost its U.S. flight schedule next month.
Jif peanut butter maker J.M. Smucker Co (N:SJM) fell 4.4% after the company forecast a decline in full-year sales on weakness in sales to restaurants and schools.