Stock futures were flat on Thursday as Wall Street looked set to build on its best day in nearly a month.
Dow Jones Industrial Average futures were down 10 points, or 0.03%. S&P 500 futures fell 0.13% and Nasdaq 100 futures fell 0.33%.
Futures changed shortly after the European Central Bank raised interest rates by 0.75 percentage points, raising its deposit rate from 0% to 0.75%, in a move widely expected to curb inflation. Traders then await a question-and-answer session from Federal Reserve Chairman Jerome Powell at the Cato Institute later in the day as they look for more clues about the central bank’s plans for future rate hikes.
The stock market is coming off a solid rally during regular trading hours on Wednesday. The Dow gained about 436 points, or 1.4%. The S&P 500 added 1.8% and the Nasdaq Composite rose 2.1%.
It was the best day since Aug. 10 for the three averages, and the Nasdaq snapped a seven-day losing streak.
Even with Wednesday’s rally, stocks remain in an overall downtrend. Concerns about a slowing economy and further rate hikes by the Federal Reserve are driving some investors away from riskier parts of the market.
“The risk of recession is increasing and as a result we have been moving more defensively in our portfolios. However, high inflation means that traditional ‘de-risking’ strategies such as cash and government bonds, can cause a drag on total returns,” Lauren Goodwin, economist. and portfolio strategist at New York Life Investments, said in a note to clients.
“We are fully invested in our portfolios, using selective bets within this overall risk-neutral position to build resilience to volatility and inflation. In our equity arm, this includes a strong overweight in equity value and dividend payers,” Goodwin added.
Thursday morning, investors will get the latest insight into the US economy with jobless claims data. Economists polled by the Dow Jones expect 235,000 initial jobless claims, up slightly from 232,000 the previous week.