After moving notably lower over the course of the previous session, stocks are likely to see further downside in early trading on Thursday. The major index futures are currently pointing to a sharply lower open for the markets, with the Dow futures down by 123 points.
The downward momentum for the markets is partly due to lingering concerns about the outlook for the Federal Reserve's asset purchase program.
In Congressional testimony on Wednesday, Fed Chairman Ben Bernanke acknowledged that upbeat economic data could lead the central bank to scale back the program in the next few meetings.
Adding to the worries, the minutes of the latest Fed meeting said a number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting.
Negative sentiment has also been generated by a report from Markit Economics and HSBC showing that Chinese manufacturing activity contracted in May.
The report showed that the purchasing managers index fell to 49.6 in May from 50.4 in April, with a reading below 50 indicating a contraction. Economists had expected the index to remain unchanged.
Traders are also digesting a recent report from the Labor Department showing a bigger than expected drop in weekly jobless claims in the week ended May 18th.
Although the bigger than expected drop in jobless claims is a positive sign for the labor market, the data is also likely to add to concerns about the Fed scaling back stimulus.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.