Focus On Next Week's Fed Meeting May Lead To Choppy Trading On Wall Street

With traders looking for more clarity about the outlook for the markets, stocks may show a lack of direction in early trading on Thursday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures up by just 0.1 percent.

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.

On the U.S. economic front, the Labor Department released a report showing first-time claims for U.S. unemployment benefits increased by much more than expected in the week ended June 3rd.

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.

Shortly after the start of trading, 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.

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.

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Thursday. Japan’s Nikkei 225 Index slid by 0.9 percent, while China’s Shanghai Composite Index climbed by 0.5 percent.

The major European markets have also turned mixed on the day. 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.

In commodities trading, 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.

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