U.S. stock futures gave up early gains following data on the labor market that disappointed on Thursday morning.
Weekly filings for unemployment insurance totaled 229,000 last week, the most since January, and a sign of potential stress building in the labor market.
Just after this report’s release at 8:30 a.m. ET, all three major indexes were pointing to losses at the open, with S&P and Dow futures off just less than 0.1% while Nasdaq futures were down over 0.2%.
Ahead of this data, all three major indexes were pointing to gains north of 0.4% at the open.
Oil prices were little-changed at $122 per barrel, and the U.S. 10-year Treasury yield stood at 3.06%, north of the 3% level the 10-year breached earlier this week for the first time since early May.
A report indicating the highly-anticipated initial public offering of Jack Ma’s Ant Group is on the horizon appeared to buoy sentiment in morning trade. According to Bloomberg News, China is expected to allow the Alibaba (BABA) affiliate to proceed with the listing in a sign that regulators may be dialing on a tech crackdown that halted the IPO two years ago.
Elsewhere in futures markets, shares of Tesla (TSLA) were up more than 3% before the open following an upgrade from UBS to Buy in a report that also said the electric vehicle giant is “best positioned to become one of the top-3 global car makers by 2030.”
Moves in early trading Thursday come after a down day on Wall Street that saw stocks resume losses after back-to-back sessions of gains. On Wednesday, the S&P 500 shed 1% while the Dow and Nasdaq fell roughly 0.8% and 0.7%, respectively.
Investors continue to look for clues on how the economy is faring amid tighter financial conditions and how aggressive the Federal Reserve rate hiking cycle may get before a potential pause.
The latest weekly jobless claims report follows strong May employment data last Friday that likely signaled to policymakers current labor market conditions can withstand further monetary tightening. Central bank officials have taken cues from the labor market on the tempo of rate increases as it fights inflation, with policy aimed to cool labor demand just enough not to push the jobless rate too high.
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“Looking ahead, the Fed is most likely to feel reassured that it has struck the right balance lately,” DWS U.S. Economist Christian Scherrmann said. “That, in turn, means it is likely to stick to its aggressive monetary normalization path,” he added, also indicating that such a roust labor market gives “plenty of headroom” to raise interest rates.
Investors are bracing for the Bureau of Labor Statistics’ latest Consumer Price Index (CPI) on Friday – a focal point on the economic data from this week. May’s reading is projected to show inflation slightly abated in May from April’s elevated 8.3% rate, with consensus economists looking for headline inflation to rise at a 8.2% annual rate for May, and by 5.9% excluding food and energy prices.
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8:36 a.m. ET: Jobless claims hit five-month high last week
The latest report on weekly jobless claims suggest some softening in the U.S. labor market.
Initial filings for unemployment insurance rose to 229,000 last week, up 27,000 from the prior week and the highest weekly total since the week of January 14. Economists expected initial claims would total 206,000, according to estimates from Bloomberg.
Continuing claims for unemployment insurance stood at 1.306 million for the week ending May 28, unchanged from the prior week.
Initial claims were a closely-watched source of stress in the labor market in the earliest days of the pandemic, totaling more than 6 million in a single week at the peak in April 2020.
Claims have since moved down to multi-decade lows, but economists have flagged this data series as offering the best real-time window into the state of the U.S. labor market. Against this backdrop, the recent rise in initial claims bears close watching into the summer months.
—Myles Udland, senior markets editor
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7:17 a.m. ET: Stock futures advance as Wall Street attempts to come back from losses
Here were the main moves in futures trading ahead of market open Thursday:
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S&P 500 futures (ES=F): +20.50 (+0.50%) to 4,134.50
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Dow futures (YM=F): +146.00 (+0.44%) to 33,035.00
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Nasdaq futures (NQ=F): +67.25 (+0.53%) to 12,683.00
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Crude (CL=F): +$0.01 (+0.01%) to $122.12
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Gold (GC=F): -$6.50 (-0.35%) to $1,850.00 per ounce
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10-year Treasury (^TNX): +5 bps to yield 3.0290%
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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