Wall Street futures fall as jobless claims hover at one million mark; focus shifts to Powell

(Reuters) – U.S. stock index futures fell on Thursday as weekly jobless claims hovered near the 1 million mark, while investors waited to hear from Jerome Powell on the Federal Reserve’s approach to lifting the economy out of a pandemic-led recession.

Initial claims for state unemployment benefits totaled a seasonally adjusted 1.006 million for the week ended Aug. 22, compared with 1.104 million in the prior week, the Labor Department said on Thursday. Economists polled by Reuters had forecast 1 million applications.

Even as unemployment remains at high levels in the worst downturn since the Great Depression, the S&P 500 and the Nasdaq have risen to new highs, largely driven by investors pouring into heavyweight technology-related stocks.

All eyes are now on Powell, who is likely to make a case for higher inflation tolerance and lower interest rates in an overhaul of the central bank’s policy approach in his remarks at the virtual Jackson Hole symposium. The Fed chief’s address begins at 9:10 a.m. EDT (1310 GMT).

“All this free money is going to start to show up in the form of some type of inflation,” said Dennis Dick, head of markets structure, proprietary trader at Bright Trading LLC in Las Vegas.

“The money managers are starting to get ahead of that trade and that’s why they continue to go into the stocks that they deem the safest, which is the tech stocks right now.”

At 8:34 a.m. ET, Dow e-minis 1YMcv1 were down 3 points, or 0.01%, S&P 500 e-minis EScv1 were down 3 points, or 0.09% and Nasdaq 100 e-minis NQcv1 were down 22.75 points, or 0.19%.

Among early movers, NetApp Inc (NTAP.O) jumped 8.5% in premarket trading after it posted better-than-expected quarterly results, powered by demand for its cloud services.

Abbott Laboratories (ABT.N) surged 9% after the medical device maker won U.S. marketing authorization for a $5 rapid COVID-19 portable antigen test.

Cosmetics maker Coty Inc (COTY.N) shed 4.7% after posting a bigger-than-expected quarterly loss as demand for its beauty products took a hit from closures of stores and parlors.

Source: reuters.com

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