The stock market might see an upward shift on Thursday, bouncing back from Wednesday's significant decline. Market forecasts predict a higher start to the day, with S&P 500 futures gaining by 0.4 percent.
Many traders might view Wednesday's steep drop as an opportunity to buy, harboring optimism for an imminent continuation of the market's resilient upward trend established since January's commencement.
Despite the Federal Reserve signaling that an interest rate cut in March is improbable, economics experts maintain that it will inevitably lower, with the question becoming "when" rather than "if". The CME Group's FedWatch tool currently suggests a modest 37.5 percent chance of a March rate cut but greatly increases to an almost certain 100 percent prediction of a rate reduction by early May.
An anticipated continued decrease in treasury yields could also stimulate buying interest on Wall Street, with the benchmark ten-year note yield dropping to its lowest in nearly a month.
Adding potential positivity to rate forecasts, the Labor Department reported a surprise modest increase in first-time claims for U.S. unemployment benefits during the week ending January 27. Initial jobless claims rose to 224,000, which is an increase of 9,000 from the previous week's revised level of 215,000. Contrasting to the economist's initial expectations that jobless claims would slightly drop to 212,000, as opposed to the 214,000 actually reported for the previous week.
On Friday, the Labor Department is set to release its more detailed report on January's employment. Current predictions stand at an increase of 180,000 jobs in January following December's surge of 216,000 positions, while a minute rise in the unemployment rate to 3.8 percent from 3.7 percent is anticipated.
The Institute for Supply Management, shortly after the beginning of trading, will release its report on January's manufacturing activity. The ISM's manufacturing PMI is projected to slightly drop to 47.0 in January from December's 47.4, indicating a contraction if the reading falls below 50.
The Commerce Department also has plans to reveal its construction spending report for December, with an expected increase in construction spending by 0.5 percent.
Wednesday saw a sharp descent in stocks, with significant losses across the averages, following the diverse performance seen in the previous session. The tech-centric Nasdaq suffered a particularly harsh blow, further extending the notable pullback observed on Tuesday.
Markets in the Asia-Pacific region displayed a mixed performance again on Thursday. Japan's Nikkei 225 Index fell by 0.8 percent, while the Hang Seng Index in Hong Kong saw a 0.5 percent rise.
Major European markets exhibited similar variability on the day. The FTSE 100 Index in the U.K. rose by 0.1 percent, but the DAX Index in Germany fell by 0.1 percent, and France's CAC 40 Index fell by 0.6 percent.
In commodities trading, crude oil futures climbed $0.82 to $76.67 a barrel, following a sharp fall of $1.97 to $75.85 a barrel on Wednesday. On the other hand, gold futures, which increased by $16.40 to $2,067.40 an ounce in the previous session, fell by $15.70 to $2,051.70 an ounce.
Finally, regarding currency, the U.S. dollar is trading at 146.51 yen, compared to 146.92 yen at the close of New York trading on Wednesday. Against the euro, the dollar is valued slightly higher at $1.0822, compared to Wednesday's $1.0818.
