Futures Pointing To Extended Pullback On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to extend the pullback seen over the two previous sessions.

Ongoing concerns about the near-term outlook for the artificial intelligence trade may continue to weigh on the markets.

Nvidia (NVDA) and Oracle (ORCL) may continue to lead the markets lower, with the AI players slumping 1.2 percent and 3.5 percent, respectively, in pre-market trading.

The futures saw further downside following the release of a batch of largely upbeat U.S. economic data, including a Labor Department report showing an unexpected decrease by first-time claims for U.S. unemployment benefits in the week ended September 20th.

The Labor Department said initial jobless claims fell to 218,000, a decrease of 14,000 from the previous week's revised level of 232,000.

Economists had expected jobless claims to inch up to 235,000 from the 231,000 originally reported for the previous week.

The data may lead to worries signs of strength in the labor market will convince the Federal Reserve it is not necessary to continue lowering interest rates.

The Commerce Department also released a report unexpectedly showing a significant rebound by durable goods orders in the month of August.

The report said durable goods orders surged by 2.9 percent in August after tumbling by a revised 2.7 percent in July.

Economists had expected durable goods orders to decrease by 0.5 percent compared to the 2.8 percent plunge that had been reported for the previous month.

On Friday, the Commerce Department is scheduled to release its report on personal income and spending in August, which includes the Fed's preferred readings on consumer price inflation.

After coming under pressure over the course of Tuesday's session, stocks saw further downside during trading on Wednesday. The major averages showed a lack of direction early in the session but slid more firmly into negative territory as the day progressed.

The major averages finished the day off their worst levels but still moderately lower. The Dow slid 171.50 points or 0.4 percent at 46,121.28, the Nasdaq fell 75.62 points or 0.3 percent to 22,497.86 and the S&P 500 dipped 18.95 points or 0.3 percent to 6,637.97.

The extended pullback on Wall Street may partly have reflected uncertainty about the near-term outlook for the artificial intelligence trade following Tuesday's weakness.

AI darling and market leader Nvidia slid by 0.9 percent after tumbling by 2.8 percent on Tuesday, while fellow AI player Oracle slumped by 1.7 percent.

Concerns about valuations may also have continued to weigh on the markets after comments from Federal Reserve Chair Jerome Powell suggesting he believes stocks may be overvalued.

During comments at an event in Rhode Island on Tuesday, Powell described equity prices as "fairly highly valued" following the recent run to record highs.

Traders also continue to express some uncertainty about the outlook for interest rates, with Powell saying that near-term risks to inflation are tilted to the upside and risks to employment to the downside, which he called a "challenging situation."

Powell warned there is "no risk-free path" for rates, noting that cutting rates too aggressively could "leave the inflation job unfinished" but leaving rates too high for too long could unnecessarily lead to labor market weakness. Computer hardware stocks moved sharply lower over the course of the session, with the NYSE Arca Computer Hardware Index tumbling by 2.3 percent after ending Tuesday's trading at a record closing high.

Significant weakness also emerged among gold stocks amid a pullback by the price of the precious metal, resulting in a 2.2 percent slump by the NYSE Arca Gold Bugs Index.

Airline stocks also came under pressure as the day progressed, dragging the NYSE Arca Airline Index down by 1.6 percent.

Networking, brokerage and telecom stocks also saw notable weakness, while energy stocks bucked the downtrend amid a continued surge by the price of crude oil.

Commodity, Currency Markets

Crude oil futures are falling $0.42 to $64.57 a barrel after surging $1.58 to $64.99 a barrel on Wednesday. Meanwhile, after tumbling $47.60 to $3,768.10 an ounce in the previous session, gold futures are inching up $3.60 to $3,771.70 an ounce.

On the currency front, the U.S. dollar is trading at 149.19 yen versus the 148.90 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1701 compared to yesterday's $1.1738.

Asia

Asian stocks ended little changed in muted trading on Thursday as an AI-driven rally showed signs of fatigue and hopes of aggressive Fed rate cuts faded.

Amid renewed concerns stemming from a U.S. labor market slowdown and sticky inflation, investors awaited more U.S. economic data, including jobless claims and PCE inflation data for directional cues.

China's Shanghai Composite Index ended just below the unchanged line at 3,853.80. U.S. President Donald Trump is expected to sign the TikTok deal later today, according to reports.

Hong Kong's Hang Seng Index edged down 0.1 percent to 26,484.68 as the city returned to normalcy after Super Typhoon Ragasa.

Japanese markets ended modestly higher after minutes from the Bank of Japan's July meeting signaled policymakers remain inclined to resume interest rate hikes in the future if economic and price conditions develop as expected.

The Nikkei 225 Index rose 0.3 percent to 45,754.93, as the 40-year bond yield dropped to a one-month low after strong demand at an auction.

The broader Topix Index settled 0.5 percent higher at 3,185.35 ahead of Friday's Tokyo inflation report, which may provide additional direction on the policy outlook.

Seoul stocks ended little changed, with the Kospi finishing marginally lower at 3,471.11 amid tariff concerns.

South Korea's investment projects in the U.S. will remain in limbo until visa issues are resolved, South Korea's Prime Minister Kim Min-seok said in an interview with Bloomberg.

Australian markets finished marginally higher after a choppy session as a rally in copper miners due to a sharp jump in metal prices offset losses among banks and gold stocks.

Woodside Energy Group rallied 2.5 percent after it signed an agreement to supply about 5.8 billion cubic meters of liquefied natural gas to Turkish state-owned petroleum company BOTAS.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index slipped 0.2 percent to 13,153.79, reversing gains from the previous session.

Europe

European stocks have moved mostly lower on Thursday as sticky inflation and a slowing job market clouded the outlook for U.S. interest rates.

The downside, however, remained capped after a closely-watched survey showed German consumer confidence is set to halt its downward trend in October.

The forward-looking consumer confidence index rose to -22.3 in October from revised -23.5 in the previous month as income expectations strengthened.

The German DAX Index is down by 1.0 percent, the French CAC 40 Index is down by 0.8 percent and the U.K.'s FTSE 100 Index is down by 0.4 percent.

TotalEnergies has moved to the downside in Paris after announcing that it plans to reduce the pace of its share buybacks for the rest of this year.

Defense contractor Babcock International has also moved notably lower in London after keeping its full-year expectations unchanged.

On the other hand, automakers are broadly higher after industry data showed European car registrations rose for a second month in August.

Retailer JD Sports Fashion has also shown a strong move to the upside after launching a £100 million share buyback program.

Health and safety device maker Halma has also moved higher after raising its full-year revenue growth forecast.

U.S. Economic News

A report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits unexpectedly declined in the week ended September 20th.

The Labor Department said initial jobless claims fell to 218,000, a decrease of 14,000 from the previous week's revised level of 232,000.

Economists had expected jobless claims to inch up to 235,000 from the 231,000 originally reported for the previous week.

The report said the less volatile four-week moving average also slipped to 237,500, a decrease of 2,750 from the previous week's revised average of 240,250.

After reporting a sharp pullback by new orders for U.S. manufactured durable goods over the two previous months, the Commerce Department released a report on Thursday unexpectedly showing a significant rebound by durable goods orders in the month of August.

The Commerce Department said durable goods orders surged by 2.9 percent in August after tumbling by a revised 2.7 percent in July.

Economists had expected durable goods orders to decrease by 0.5 percent compared to the 2.8 percent plunge that had been reported for the previous month.

Excluding a spike in orders for transportation equipment, durable goods orders rose by 0.4 percent in August after jumping by 1.0 percent in July. Ex-transportation orders were expected to come in unchanged.

Revised data released by the Commerce Department on Thursday showed the U.S. economy unexpectedly grew by much more than previously estimated in the second quarter of 2025.

The report said real gross domestic product surged by 3.8 percent in the second quarter compared to the previously reported 3.3 percent jump. Economists had expected the pace of GDP growth to be unrevised.

The Commerce Department said the unexpectedly stronger than previously reported GDP growth primarily reflected an upward revision to consumer spending.

The sharp increase in GDP the second quarter came following a 0.6 percent decrease in the first quarter, with the upturn primarily reflecting a downturn in imports and an acceleration in consumer spending.

Kansas City Federal Reserve President Jeffrey Schmid is scheduled to speak on "The View from Main Street" before the Mid-Sized Bank Coalition of America at 9 am ET.

At 10 am ET, Federal Reserve Vice Chair for Supervision Michelle Bowman is due to speak on "Supervision and Regulation" at the Financial Markets Quality Conference 2025.

The National Association of Realtors is also scheduled to release a separate report on existing home sales in the month of August at 10 am ET. Existing home sales are expected to decrease by 1.3 percent to an annual rate of 3.96 million in August after jumping by 2.0 percent to an annual rate of 4.01 million in July.

At 1 pm ET, Federal Reserve Governor Michael Barr is due to participate in a conversation on "Bank Stress Testing" before the Peterson Institute for International Economics.

The Treasury Department is also scheduled to announce the results of this month's auction of $44 billion worth of seven-year notes at 1 pm ET.

At 1:40 pm ET, the Federal Reserve Bank of Dallas is due to release the text of Dallas Fed President Lorie Logan's remarks before a closed Federal Reserve Bank of Richmond Collaboration of Research Economists Week Panel.

San Francisco Federal Reserve President Mary Daly is scheduled to participate in a conversation before the Federal Reserve Bank of San Francisco 2025 Western Bankers Forum at 3:30 pm ET.