US Market

The major U.S. index futures are currently pointing to a roughly flat open on Thursday, as traders look for more clarity about the outlook for the markets.

Traders may be reluctant to make significant moves as they continue to look ahead to next week’s Federal Reserve meeting.

The Fed is due to announce its latest monetary policy decision next Wednesday, with the central bank widely expected to pause its recent series of interest rate hikes.

Key inflation reports are also likely to be in the spotlight next week, as the data could impact whether the Fed resumes its rate hikes next month.

CME Group’s FedWatch Tool is currently indicating a 72.5 percent chance the Fed will leave rates unchanged next week but a 51.0 percent chance of another rate hike in July.

Following the lackluster performance to start the week, the major U.S. stock indexes moved in opposite directions during trading on Wednesday. While the tech-heavy Nasdaq moved sharply lower, the Dow posted a modest gain.

The Nasdaq tumbled 171.52 points or 1.3 percent to 13,104.90 after ending Tuesday’s trading at its best closing level in well over a year. The S&P 500 also fell 16.33 points or 0.4 percent to 4,267.52, while the Dow rose 91.74 points or 0.3 percent to 33,665.02.

The sharp pullback by the Nasdaq came after the Bank of Canada once again raised interest rates after leaving rates unchanged for two straight meetings, raising the concerns about the outlook for U.S. rates.

The Bank of Canada increased its target for the overnight rate by 25 basis points to 4.75 percent, citing stubbornly high inflation and stronger than expected economic growth.

“Canada’s central bank is viewed as one of the leaders when it comes to being proactive with monetary policy,” said Edward Moya, senior market analyst at OANDA. “They were the first to raise rates in 2022 and then put them on hold earlier this year.”

He added, “The BOC is signaling that more rate hikes could come and that has everyone rethinking that the Fed will be done after the July hike.”

Meanwhile, the Dow benefited from strong gains by defensive stocks such as Caterpillar (CAT) and 3M Co. (MMM).

In U.S. economic news, a report released by the Commerce Department showed the U.S. trade deficit widened significantly in the month of April.

The Commerce Department said the trade deficit increased to $74.6 billion in April from a revised $60.6 billion in March.

Economists had expected the trade deficit to jump to $75.2 billion from the $64.2 billion originally reported for the previous month.

The wider trade deficit came as the value of exports plunged by 3.6 percent to $249.0 billion, while the value of imports surged by 1.5 percent to $323.6 billion.

Software stocks moved sharply lower over the course of the session, dragging the Dow Jones U.S. Software Index down by 3.3 percent. The index continued to give back ground after reaching its best closing level in over a year on Monday.

Significant weakness also emerged among retail stocks, with the Dow Jones U.S. Retail Index falling by 1.4 percent after ending Tuesday’s trading at a nearly nine-month closing high.

Meanwhile, energy stocks saw substantial strength on the day, driving the Philadelphia Oil Service Index and the NYSE Arca Oil Index up 3.4 percent and 2.9 percent, respectively. The rally by energy stocks came amid an increase by the price of crude oil.

Transportation stocks also saw considerable strength, resulting in a 2.5 percent surge by the Dow Jones Transportation Average. The average ended the session at its best closing level in well over a month.

U.S. Economic Reports

First-time claims for U.S. unemployment benefits increased by much more than expected in the week ended June 3rd, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims climbed to 261,000, an increase of 28,000 from the previous week’s revised level of 233,000.

Economists had expected jobless claims to inch up to 235,000 from the 232,000 originally reported for the previous week.

With the much bigger than expected advance, jobless claims reached their highest level since hitting 264,000 in the week ended October 30, 2021.

At 10 am ET, the Commerce Department is scheduled to release its report on wholesale inventories in the month of April. Wholesale inventories are expected to dip by 0.2 percent.

Stocks in Focus

Shares of HashiCorp (HCP) are moving sharply lower in pre-market trading after the software company reported better than expected fiscal first quarter revenues but announced targeted cuts in discretionary spending and an 8 percent workforce reduction.

Signet Jewelers (SIG) is also likely to come under pressure after reporting fiscal first quarter earnings that exceeded analyst estimates but lowering its full-year guidance.

Shares of GameStop (GME) are also seeing substantial pre-market weakness after the video game retailer announced the termination of chief executive Matthew Furlong and the election of Ryan Cohen as Executive Chairman.

On the other hand, shares of Lucid (LCID) may move to the upside after the head of the electric vehicle maker’s China operations said the company it is preparing to enter the Chinese market.

Europe

European markets are trading mixed on Thursday amid investor concerns about rising interest rates and slowing economic growth after the Bank of Canada’s unexpected rate hike and ahead of key monetary policy reviews next week.

While the U.K.’s FTSE 100 Index is down by 0.1 percent, the German DAX Index is up by 0.2 percent and the French CAC 40 Index is up by 0.3 percent.

British transport company FirstGroup plc’s has moved sharply higher after reporting a turnaround to profit before tax for fiscal 2023, amidst an increase in revenue. The firm is planning for an additional buyback of up to 115 million pounds of shares.

RWS Holdings plc has also surged after the provider of technology-enabled language, content and intellectual property services reported higher revenues in its first half and said it plans to launch a share repurchase program of up to 50 million pounds. Meanwhile, profit declined in the period, and the firm said its full year outlook is expected to be in line with current market expectations.

Wizz Air Holdings PLC has also moved higher as it reported a narrower loss for fiscal 2023 on significantly higher revenues. The company’s load factor increased 12.4 percent and RPKs grew 98.7 percent. The airline expects a profit in fiscal 2024.

Saint-Gobain shares are also rising in Paris after the French building materials firm said it expects a double-digit operating margin for the first half and maintained its fiscal 2023 outlook for operating margin between 9 percent and 11 percent, in line with the ‘Grow & Impact’ strategic plan target.

Meanwhile, Crest Nicholson Holdings PLC has tumbled after reporting weak revenues in its first half, even as profit turned around from last year’s loss.

Mitie Group PLC shares have also fallen. The outsourcing company reported flat annual earnings, while pre-tax earnings grew with strong revenue growth.

Asia

Asian markets finished trading on a mixed note on Thursday amidst anxiety surrounding hawkish monetary policy and hopes of stimulus in China.

Concerns about rising interest rates and slowing economic growth dominated market sentiment. Inflation readings from China due later in the day are expected to show a minor uptick in inflation.

China’s Shanghai Composite Index gained 15.83 points or 0.5 percent to finish trading at 3213.59. The day’s trading ranged between 3,180.54 and 3,225.53. The Shenzhen Component Index also added 14.05 points or 0.1 percent to close at 10,722.87.

The Japanese benchmark Nikkei 225 Index shed 272.47 points or 0.9 percent to end trading at 31,641.27. The day’s trading range was between 31,420.45 and 32,035.95.

Eisai Co. surged 7.4 percent. Oki Electric Industry Co. rallied 4.6 percent. Kawasaki Kisen Kaisha, Tokyo Electric Power Co. and Chiyoda Corp. all rallied more than 3 percent.

Citizen Holdings Co. was the biggest laggard with a decline of 7.3 percent. Taiyo Yuden Co., Trend Micro, Yamato Holdings Co. and Konami Corp. all declined more than 3 percent.

The Hang Seng Index of the Hong Kong Stock Exchange added 47.18 points or 0.3 percent from the previous close to finish trading at 19,299.18. The day’s trading range was between a high of 19,339.82 and a low of 19.087.66.

The Korean Stock Exchange’s Kospi Index dipped 4.75 points or 0.2 percent to close trading at 2,610.85. The day’s trading range was between 2,595.33 and 2,612.39.

Australia’s S&P/ASX200 Index closed trading at 7,099.70 after losing 18.30 points or 0.3 percent. The day’s trading range was between 7,093.50 and 7,132.00.

Energy business New Hope Corp. was the top gainer with a surge of 8.6 percent. Whitehaven Coal, another energy business added 5.5 percent, followed by Computershare, which gained 4.7 percent. Healthcare business Healius and Beach Energy both gained more than 3 percent.

Pharma business Imugene declined 7 percent. Centuria Capital Group followed with a loss of 6.3 percent. Healthcare business Polynovo, Reliance Worldwide Corp. and Boral all declined in excess of 5 percent.

Commodities

Crude oil futures are rising $0.41 to $72.94 a barrel after climbing $0.79 to $72.53 a barrel on Wednesday. Meanwhile, after tumbling $23.10 to $1,958.40 ounce in the previous session, gold futures are gaining $8.30 to $1,966.70 an ounce.

On the currency front, the U.S. dollar is trading at 139.42 yen versus the 140.13 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0749 compared to yesterday’s $1.0699.