U.S. stock futures are slightly higher on Thursday following the lackluster performance seen in recent sessions. With the Federal Reserve pouring cold water on the market’s hope for expeditious rate cuts, the mood will likely revert to data-dependency. Against the backdrop, investors could remain keyed in on the day’s two labor market reports on private payrolls and jobless claims. Wednesday’s JOLTS survey results showed that job openings came in slightly below expectations in November.
The spotlight will be on small-cap stocks as they plummeted on Wednesday. Traders may also watch the spike in crude oil prices and the uptick seen in bond yields.
Cues From Wednesday’s Trading:
The FOMC minutes released Wednesday served to intensify the uncertainty surrounding the rate outlook and aggravated the weakness seen in the market in the recent sessions.
The Fed meeting minutes were ”another attempt by the Fed to walk back some of the overly-dovish interpretation of the December FOMC meeting,” said Allianz Investment Management Senior Investment Strategist Charlie Ripley.
“At the end of the day, the Fed believes market conditions may have gotten ahead of themselves and minutes moving expectations back as the probability of a March rate cut continues to decline,” he added.
The major averages opened lower and continued to move roughly sideways at depressed levels before closing notably lower for the session.
The indices pulled back toward their lowest levels in either mid- or late-December.
Most S&P 500 sectors, except utility, energy and communication services stocks, moved to the downside on Wednesday.
US Index Performance On Wednesday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -1.18% | 14,592.21 |
| S&P 500 Index | -0.80% | 4,704.81 |
| Dow Industrials | -0.76% | 37,430.19 |
| Russell 2000 | -3.35% | 1,959.20 |
Analyst Color:
Expecting a rate cut in the first quarter could prove to be a pipedream, according to a Morgan Stanley analyst. The firm expects stable rates at least until the first half of the year. Ellen Zentner, chief U.S. economist at the firm, said she sees six-month core consumer price inflation likely increasing in the first quarter, prompting the Fed to watch and wait.
“Unless there is an unexpectedly sharp economic downturn…
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