The major U.S. index futures indicate a modestly lower open on Thursday, with stocks likely to experience a downturn following a narrowly mixed conclusion in the previous session.Futures dipped after a report from payroll processor ADP revealed a much smaller-than-expected increase in U.S. private sector employment for August. According to ADP, private sector employment climbed by only 99,000 jobs in August, following a downward revision to 111,000 jobs in July. Economists had anticipated an increase of 145,000 jobs, compared to the originally reported 122,000 jobs for the previous month.”The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth,” noted ADP Chief Economist Nela Richardson. “The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown.”This data is likely to heighten concerns regarding the economic outlook but could also enhance the likelihood of accelerated interest rate cuts by the Federal Reserve.In the meantime, the Labor Department issued a separate report showing a slight decrease in first-time claims for U.S. unemployment benefits for the week ending August 31.Following Tuesday’s sell-off, stocks exhibited a lack of direction throughout Wednesday’s trading session, with major averages fluctuating across the unchanged line.Ultimately, the major averages closed the day with mixed results. The Dow inched up by 38.04 points or 0.1% to 40,974.97, while the S&P 500 dipped by 8.86 points or 0.2% to 5,520.07, and the Nasdaq fell by 52.00 points or 0.3% to 17,084.30.This lackluster performance on Wall Street likely reflects uncertainty about the near-term market outlook amid substantial volatility over the past few months. Stocks reached new record highs in mid-July, only to experience significant sell-offs in early August due to economic concerns.Since then, stocks have rebounded substantially, with the Dow recently hitting a new record high, fueled by trader optimism about potential interest rate cuts by the Federal Reserve later this month.However, economic worries persist, especially following Tuesday’s disappointing manufacturing activity readings.Additionally, the Labor Department’s report showed a larger-than-expected decrease in job openings in the U.S. for July. Job openings fell to 7.67 million in July from a downwardly revised 7.91 million in June, versus economists’ expectations of a dip to 8.10 million from the previously reported 8.18 million.”The report provides further evidence of cooling labor market conditions but doesn’t alter our forecast for a 25 basis point interest rate cut by the Federal Reserve at the FOMC meeting on September 18,” stated Nancy Vanden Houten, U.S. Lead Economist at Oxford Economics. She added, “Despite a slight uptick in hiring, increased layoffs and separations suggest some downside risk to our forecast of 170,000 job growth in August.”Most major sectors exhibited only modest changes, contributing to the broader market’s lackluster performance. However, energy stocks experienced notable weakness, with crude oil prices plunging below $70 a barrel to their lowest levels in nine months. Reflecting this decline, the Philadelphia Oil Service Index and the NYSE Arca Oil Index both slid by 1.5%.Stocks in gold, steel, and computer hardware sectors also faced declines, whereas telecom stocks surged, driving the NYSE Arca North American Telecom Index up by 2.2%.### Commodity and Currency MarketsCrude oil futures are rising by $0.71 to $69.91 a barrel after dropping by $1.14 to $69.20 a barrel on Wednesday. Gold futures, having inched up by $3 to $2,526 an ounce in the previous session, are now jumping by $26.90 to $2,552.90 an ounce.In currency markets, the U.S. dollar is trading at 143.11 yen, down from 143.74 yen in Wednesday’s New York trading. Against the euro, the dollar is valued at $1.1094, compared to $1.1082 in the previous session.### AsiaAsian stocks ended Thursday’s trading mixed as investors assessed weak U.S. manufacturing data and awaited further U.S. data, including Friday’s key jobs report, for future market direction. The dollar struggled to find stability in Asian trading, aiding gold prices in reclaiming some ground. Crude prices rose modestly, as industry data indicated a decline in U.S. inventories for the week ending August 30.**Asia-Pacific Markets**China’s Shanghai Composite Index marginally increased by 0.1% to 2,788.31 following reports suggesting that authorities might consider reducing interest rates on up to $5.3 trillion in mortgages as part of efforts to bolster the struggling property market and economy.In contrast, Hong Kong’s Hang Seng Index dipped by 0.1% to 17,444.30 amid growth concerns triggered by a private survey that indicated a slowdown in China’s services sector activity in August, despite the peak travel season.In Japan, markets sharply declined as investor sentiment was dampened by a stronger yen and losses in semiconductor-related stocks. The yen maintained its strength against the dollar, fueling speculation of a potential rate hike by the Bank of Japan. Consequently, the Nikkei 225 Index dropped 1.1% to 36,657.09, marking its lowest point since August 14 and extending its losing streak to a third session. The broader Topix Index declined by 0.5% to 2,620.76. Notably, semiconductor test equipment maker Advantest fell 2.9%, while Tokyo Electron lost 2.5%, following a slump in U.S. tech shares, including Nvidia. Market heavyweight Fast Retailing tumbled by 3.8%.Meanwhile, South Korea’s stock market faced a slight downturn as revised data revealed a 0.2% contraction in the economy during the second quarter, driven by weaker domestic consumption and lower private business investment. The Kospi slid by 0.2% to 2,575.50.Australian stocks experienced modest gains, with rate-sensitive banks and real estate stocks leading the upward momentum. This gain occurred despite Reserve Bank of Australia (RBA) Governor Michele Bullock’s warning against expecting imminent rate cuts. The benchmark S&P/ASX 200 Index rose by 0.4% to 7,982.40, recovering from two days of declines, while the broader All Ordinaries Index also climbed by 0.4% to 8,187.70.On the other hand, New Zealand’s benchmark S&P/NZX-50 Index surged by 1.0% to 12,678.66.**European Markets**European stocks presented a mixed performance on Thursday, following a two-week low on Wednesday due to growth concerns. The Eurozone’s retail sales volumes experienced a slight increase of 0.1% month-on-month in July, aligning with market expectations. In a separate report, German factory orders saw an unexpected rise in July, largely driven by a surge in demand for transportation equipment. New orders advanced by 2.9% on a monthly basis, following June’s revised 4.6% expansion, far surpassing the forecasted 1.6% decline.While Germany’s DAX Index rose by 0.2%, the U.K.’s FTSE 100 Index and France’s CAC 40 Index fell by 0.2% and 0.7%, respectively. Noteworthy movements included German specialty chemicals company Lanxess AG, which saw a significant rise after Morgan Stanley upgraded its rating to “Overweight” from “Underweight.” Additionally, Ashmore Group rallied following a relatively positive set of final results. Homebuilder Vistry Group saw a surge after announcing a share buyback worth £130 million ($171 million). Conversely, Churchill China shares plummeted after the British pottery giant reported a 7.8% drop in revenue to £40.6 million for the first half of 2024, and Associated British Foods declined sharply after reporting that wet weather negatively impacted its second-half retail sales.**U.S. Economic News**In the U.S., a report released by payroll processor ADP on Thursday revealed that private sector employment rose significantly less than expected in August. ADP reported an increase of 99,000 jobs, compared to a downwardly revised 111,000 jobs in July, falling short of economists’ expectations of a 145,000 job rise.Simultaneously, the Labor Department released data showing a modest decline in first-time claims for unemployment benefits for the week ending August 31. Initial jobless claims fell to 227,000, a reduction of 5,000 from the previous week’s revised level of 232,000, slightly better than economists’ prediction of 230,000.Additionally, the Labor Department’s report indicated that the four-week moving average of jobless claims, which is less volatile, decreased to 230,000, down 1,750 from the previous week’s revised average of 231,750.Another Labor Department report highlighted an upward revision in labor productivity for the second quarter, which jumped by 2.5% compared to the previously reported 2.3%. At the same time, unit labor costs increased by less than initially estimated, surpassing economists’ expectations that the pace of productivity growth would remain unchanged.The revised productivity growth for the second quarter shows a notable acceleration, surpassing the 0.4 percent increase observed in the first quarter.In the same vein, unit labor costs reported a 0.4 percent rise in the second quarter, contrary to the initially reported 0.9 percent increase. Economists had anticipated that the labor cost growth pace would remain unchanged. This revised figure is a marked reduction compared to the substantial 3.8 percent rise in the first quarter.The Institute for Supply Management is set to release its August service sector activity report at 10 am ET. Expectations are that the ISM’s services PMI will slightly decline to 51.1 from July’s 51.4; a reading above 50 still signifies growth.The Energy Information Administration will publish its report on oil inventories for the week ending August 30th at 11 am ET. Predictions indicate a decrease of 0.9 million barrels, following the previous week’s 0.8 million barrel decline.Furthermore, at 11 am ET, the Treasury Department will announce the details for this month’s auction of three-year and ten-year notes, as well as thirty-year bonds.**Stocks to Watch**Shares of C3.ai, Inc. (AI) are experiencing a sharp decline in pre-market trading after the artificial intelligence company reported less than expected fiscal third-quarter subscription revenue.Similarly, ChargePoint (CHPT), a company specializing in electric vehicle charging stations, is anticipated to face pressure following a fiscal second-quarter revenue report that fell short of analyst predictions and disappointing revenue guidance for the current quarter.Conversely, JetBlue (JBLU) shares are expected to show initial strength after the airline increased its revenue guidance for the third quarter.The material has been provided by InstaForex Company – www.instaforex.com
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