U.S. stock futures were mixed on Thursday, with the Dow likely to start in the red again as investors again looked to jobs data to guide interest rate developments.
Dow Jones Industrial Average (^DJI) futures fell nearly 0.2%, while S&P 500 (^GSPC) futures were largely flat after both posted a third straight closing loss on Wednesday. Nasdaq 100 (^NDX) futures pointed to a rebound in technology stocks, rising 0.2%.
Signs this week that the labor market is finally returning to normal suggest that the Federal Reserve’s anti-inflation interest rate hikes are having their desired effect. As a soft landing for the economy becomes more likely, traders have been betting on a Fed policy shift towards rate cuts.
Read more: What the Fed’s pause on rate hikes means for bank accounts, CDs, loans and credit cards
But market nerves were shaken on Thursday after Bank of Japan executives suggested the end of the central bank’s negative interest rate regime was near. That prospect helped the 10-year Treasury yield (^TNX) rise by as much as eight basis points to 4.18%.
Adding to the caution was increasing speculation that stocks were poised for a pause after their rapid November rally, with December typically a “boring” month for markets.
The latest weekly jobless claims data shows 220,000 claims were filed in the week ending Dec. 2. The number was in line with expectations of economists surveyed by Bloomberg, rising only 2,000 from the previous week, largely due to a limited increase in layoffs.
But Friday’s crucial monthly U.S. jobs report will be the real test of inflation and interest rate expectations ahead of the Fed’s final meeting of the year next week.
In commodities, oil prices recovered somewhat after hitting a five-month low. West Texas Intermediate futures (CL=F) and Brent crude futures (BZ=F), the international benchmark price, both rose less than 1%.
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