U.S. stock futures showed minimal changes on Thursday morning following the Dow Jones Industrial Average’s third consecutive day of losses.
Dow futures experienced a slight decline of 36 basis points, or 0.1%. Similarly, S&P 500 futures and Nasdaq 100 futures dipped marginally below the flat line.
After-hours trading saw Discover shares dropping by 9% after the credit card company reported an increase in its net charge-off rate during the fourth quarter compared to the previous year. Despite this, Discover exceeded expectations with fourth-quarter revenue reaching $4.20 billion, surpassing the estimated $4.10 billion, as per analysts polled by LSEG.
Wall Street is rebounding from a session marked by losses in major averages, attributed to rising Treasury yields. On the previous day, the Dow lost 94.45 points, or 0.25%, while the S&P 500 and Nasdaq Composite slipped by 0.56% and 0.59%, respectively.
During the session, the 10-year Treasury yield crossed the 4.1% mark. Investors expressed concerns that a robust December retail sales report indicating a strong consumer might lead to fewer rate cuts by the Federal Reserve than anticipated. Presently, markets are pricing in approximately a 56% chance of a quarter-percentage-point rate cut in March, according to the CME FedWatch Tool.
Chris Toomey, Managing Director at Morgan Stanley, commented on CNBC’s “Closing Bell” on Wednesday, stating, “The fact that the Fed is not talking about raising rates is a good thing, but the fact that the market’s pricing six rate cuts is a problem.” Toomey highlighted concerns about the market’s previous performance driven by chasing and emphasized that rising rates could prompt many investors to sell.
In terms of economic indicators, Thursday’s agenda includes weekly jobless claims, housing starts and building permits data, and a speech by Atlanta Fed President Raphael Bostic.
