Stock futures recover Thursday as oil prices fall; Dow futures gain 100 points


US stock futures rose Thursday as markets appeared to be recovering from two days of losses.

Futures linked to the Dow Jones Industrial Average were up about 110 points, or 0.3%. S&P 500 futures and Nasdaq 100 futures added 0.4% and 0.5%, respectively.

Investors looked to employment data showing the slowest job creation rate of the pandemic-era recovery. Private sector employment rose just 128,000 in May, ADP reported Thursday, well below its 299,000 Dow Jones estimate.

Rates fell as traders took the ADP report as a sign that the economy is already slowing, suggesting the Federal Reserve could be less aggressive in tightening monetary policy. The benchmark yield on ten-year government bonds fell back below the 2.9% level.

Some technology stocks gained as prices fell. Nvidia and Amazon were both up about 1% in the premarket.

Oil prices also fell slightly ahead of a major decision by the Organization of the Petroleum Exporting Countries on production.

Travel stocks that would benefit most from falling fuel prices rose in premarket trading. Shares of American Airlines and Carnival Corp each gained about 1%.

Investors also analyzed the results of corporate earnings. Shares of pet store Chewy rose about 18% before trading after the company reported strong quarterly results. Meanwhile, Hewlett Packard Enterprise fell nearly 5% after slight misses in both profit and sales.

The moves came after major indices posted consecutive losses on Wednesday. The Dow lost 176.89 points, or 0.5%, on Wednesday. The S&P 500 fell close to 0.8% and the Nasdaq Composite fell 0.7%. The S&P 500 is down 1.4% this week, on pace for its 8th week of decline in the last 9.

Sentiment took a dip when JPMorgan CEO Jamie Dimon warned that an economic “hurricane” was on the way, triggered by the Federal Reserve and the war in Ukraine. He said his company will be “very conservative with our balance sheet.”

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“The market remained choppy with a negative bias to start the month of June,” said Rob Haworth, senior investment strategist at US Bank Wealth Management. “Inflation remains a concern, as highlighted by higher oil prices and consumer concerns in the Fed’s Beige Book economic report.”

Indeed, the central bank’s report showed that the US has experienced only “slight or modest” economic growth over the past two months.

“Our view is cautious as we close the second quarter,” added Haworth. “Global central bank uncertainty and the pace of tighter monetary policy, still tight global energy and agricultural markets – which could lead to even higher prices – and headwinds to corporate earnings growth pose risks to future investors.”

Retail earnings continue this week, with Designer Brands, Lululemon Athletica and RH set to report on Thursday. Big tech names like CrowdStrike and Okta are also on deck.

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