After ending the previous session sharply lower in reaction to the Federal Reserve's monetary policy announcement, stocks could see some further downside in early trading on Thursday. The major index futures are pointing to a notably lower open for the markets, with the Dow futures down by 99 points.
Worries about the outlook for the Fed's stimulus program are likely to continue to weigh on the markets after Chairman Ben Bernanke said the central bank might begin scaling back its asset purchases later this year if economic conditions warrant.
Even though Bernanke sought to stress that tapering the program is highly conditional on signs of sustained economic growth, traders have still reacted negatively to the idea of a change in policy.
Peter Boockvar of Morgan Stanley said, "Assuming the Federal Reserve slows purchases in the 2nd half of the year, the market response yesterday and today is same ole, same ole."
"Every time we reach the actual end of each version of QE, markets sell off as the fallacy of somehow QE can bring us to some sort of sustainable escape economic velocity faces the reality that the Fed has made markets and the economy almost solely dependent on them," he added.
On the economic front, the Labor Department recently released a report showing a bigger than expected rebound by initial jobless claims in the week ended June 15th.
The report said initial jobless claims climbed to 354,000, an increase of 18,000 from the previous week's revised figure of 336,000. Economists had expected jobless claims to edge up to 340,000 from the 334,000 originally reported for the previous week.
Not long after the open, traders will be presented with another batch of economic data, including reports on existing home sales, Philadelphia-area manufacturing activity, and leading economic indicators.
After moving mostly higher over the course of the two previous sessions, stocks pulled back sharply during trading on Wednesday. A negative reaction to the Fed's monetary policy announcement weighed on the markets in afternoon trading.
The major averages saw some volatility following the announcement from the Fed, closing firmly in the red. The Dow plunged 206.04 points or 1.4 percent to 15,112.19, the Nasdaq tumbled 38.98 points or 1.1 percent to 3,443.20 and the S&P 500 plummeted 22.88 points or 1.4 percent to 1,628.93.
In overseas trading, stock markets across the Asia-Pacific region saw substantial weakness following the overnight sell-off on Wall Street. Japan's Nikkei 225 Index tumbled by 1.7 percent, while Hong Kong's Hang Seng Index plummeted by 2.9 percent.
The major European markets are also seeing significant weakness on the day. The U.K.'s FTSE 100 Index has slumped by 2.2 percent, while the French CAC 40 Index and the German DAX Index are both down by 2.4 percent.
In commodities trading, crude oil futures are sliding $1.45 to $96.79 a barrel after dipping $0.20 to $98.24 a barrel on Wednesday. Gold futures, which rose $7.10 to $1,374 an ounce in the previous session, are plunging $72.40 to $1,301.60 an ounce.
On the currency front, the U.S. dollar is trading at 97.68 yen compared to the 96.45 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.3207 compared to yesterday's $1.3296.
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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.