Why Nasdaq, S&P 500 Futures Are Trading Lower Thursday – Invesco QQQ Trust, Series 1

Sentiment continues to be cautious as traders play the “wait-and-watch” game until they see off Friday’s non-farm payroll data. The index futures traded moderately lower early Thursday. The weekly jobless claims data along with the ongoing tensions in the Middle East and the status of the dockworkers strike are among the key focal items for traders. The S&P 500 has gained in all but one month so far this year and the momentum is supporting the market even as it navigates through another air pocket centered this time mainly around geopolitics.

Oil’s extended run could keep energy stocks buoyant and artificial intelligence stalwart Nvidia Corp. NVDA traded higher in premarket, while electric-vehicle stocks have decelerated.

In premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY moved down 0.30% to $567.15 and the Invesco QQQ ETF QQQ slipped 0.39% to $480.09, according to Benzinga Pro data.

Cues From Last Session:

U.S. stocks closed Wednesday’s session marginally higher, as the market overcame early jitters set in motion by a stronger-than-expected private payrolls report and the ongoing headwinds such as the Middle East tensions and dockworkers’ strike. After recouping early losses, the averages moved in a narrow range around the unchanged line before ending slightly higher.

Seven of the 11 S&P 500 sectors ended in the red, while energy stocks rallied strongly and IT stocks found moderate buying interest. Utility and financial stocks rose marginally.

Insights From Analysts:

The non-farm payrolls report due on Friday is expected to show job gains of 150,000 for September, up from 142,000 in August. JPMorgan Trading Desk predicts a volatile Friday, with the S&P 500 Index potentially moving either side of the flat line in a range of a 2% decline to a 1.5% gain depending on how the numbers pan out,

• job gains over 20,000 – flat to 0.5% gain
• 160,000-20,000 – 1%-1.5% gain
• 140,000-160,000 – 0.75%-1.25%
• 110,000 – 140,000 – 0.5%-1.5% drop
• less than 110,000 – 1.25%-2% drop

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Upcoming Economic Data:

• The Labor Department will release the weekly jobless claims data at 8:30 a.m. EDT. Economists, on average, expect the number of individuals claiming unemployment benefits to come in at 220,000 in the week ended Sept. 28, up from 218,000 in the previous reporting week.
• S&P Global is due to release its final service sector manufacturing index at 9:45 a.m. EDT. The flash reading released in mid-September came in at 55.4, up from 54.2 in August.
• The Institute for Supply Management’s non-manufacturing PMI, due at 10 a.m. EDT, is expected at 51.7 in September, almost flattish at 51.5 reported for August.
• The Commerce Department will release the factory goods orders report at 10 a.m. EDT. The consensus estimate calls for unchanged orders for August relative to September when orders climbed 5% month-over-month.
• Minneapolis Fed President Neel Kashkari is due to moderate a discussion with Atlanta Fed President Raphael Bostic at 10:40 a.m. EDT.
• The Treasury will auction four- and eight-week bills at 11:30 a.m. EDT.

Stocks In Focus:

• Levi Strauss & Co. LEVI slumped nearly 11% in premarket trading on the company’s quarterly results released after the market close on Wednesday.
• AngioDynamics, Inc. ANGO and Constellation Brands, Inc. STZ are due to release their quarterly results ahead of the market opening.
• Tesla, Inc. TSLA fell over 1.50%, extending its slide from Wednesday, and most electric-vehicle stocks, including Rivian Automotive, Inc. RIVN, Lucid Group, Inc. LCID and ChargePoint Holdings, Inc. CHPT all traded down about 2%.
• Plug Power Inc. PLUG moved down 1.85% following a negative analyst action.

Commodities, Bonds And Global Equity Markets:

Crude oil futures continued their upward climb amid intensifying Middle East tensions, while gold futures fell modestly. Bitcoin BTC/USD declined over 1% below the $61K mark. The yield on the 10-year Treasury note rose 2.4 points to 3.809%.

Most Asian retreated barring the Japanese, Australian, New Zealand and Malaysian markers, while China and South Korea were closed for public holidays. The major European markets lost ground in early trading.

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