U.S. Stocks May See Further Upside In Early Trading

(RTTNews) - Stocks are likely to move to the upside in early trading on Thursday, extending the rally seen over the course of the previous session. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 68 points.

A positive reaction to the European Central Bank's monetary policy decision is likely to contribute to initial strength on Wall Street, with the ECB cutting rates and announcing a massive new bond-buying program.

The ECB lowered its main deposit rate by 10 basis points to 0.50 percent and announced plans to restart its quantitative easing program by purchasing assets at a pace of 20 billion euros per month beginning November 1st.

The central bank said it expects to keep interest rates at their present or lower levels until it has seen a sufficient increase in the inflation outlook.

The asset purchase program is expected to run for as long as necessary to reinforce the accommodative impact of the ECB's policy rates.

Following the ECB announcement, President Donald Trump took another shot at the Federal Reserve, which is due to announce its latest monetary policy decision next week.

"European Central Bank, acting quickly, Cuts Rates 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports," Trump tweeted. "And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!"

Early buying interest is also likely to be generated in reaction to news that Trump is temporarily delaying raising tariffs on $250 billion worth of Chinese imports.

Calling the move a "gesture of good will," Trump delayed raising the tariffs rate from 25 percent to 30 percent from October 1st to October 15th.

The delay comes after China granted tariff exemptions for 16 types of American-made products as a sign of goodwill ahead of the next round of trade talks.

In U.S. economic news, the Labor Department released a report showing first-time claims for unemployment benefits dropped much more than expected in the week ended September 7th.

The report said initial jobless claims fell to 204,000, a decrease of 15,000 from the previous week's revised level of 219,000. Economists had expected jobless claims to edge down to 215,000.

A separate Labor Department report showed a modest increase in U.S. consumer prices in the month of August, with higher prices for shelter and medical care partly offset by a steep drop in energy prices.

The Labor Department said its consumer price index inched up by 0.1 percent in August after rising by 0.3 percent in July. The uptick in prices matched economist estimates.

Excluding food and energy prices, core consumer prices rose by 0.3 percent in August, matching the increases seen in the two previous months. Economists had expected core prices to rise by 0.2 percent.

After moving modestly higher early in the session, stocks saw further upside over the course of the trading day on Wednesday. With the advance on the day, the major averages ended the session at their best closing levels in over a month.

The major averages reached new highs going into the close, ending the session at their best levels of the day. The Dow advanced 227.61 points or 0.9 percent to 27,137.04, the Nasdaq jumped 85.52 points or 1.1 percent to 8,169.68 and the S&P 500 climbed 21.54 points or 0.7 percent to 3,000.93.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both climbed by 0.8 percent, although Hong Kong's Hang Seng Index bucked the uptrend and dipped by 0.3 percent.

The major European markets have also moved to the upside following the ECB announcement. While the U.K.'s FTSE 100 Index has inched up by 0.1 percent, the German DAX Index and the French CAC 40 Index are up by 0.6 percent and 0.7 percent, respectively.

In commodities trading, crude oil futures are slumping $0.92 to $54.83 a barrel after plunging $1.65 to $55.75 a barrel on Wednesday. Meanwhile, after rising $4 to $1,503.20 an ounce in the previous session, gold futures are soaring $26.30 to $1,529.50 an ounce.

On the currency front, the U.S. dollar is trading at 107.69 yen compared to the 107.82 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.0948 compared to yesterday's $1.1010.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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