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U.S. Stocks May See Further Upside In Early Trading

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Stocks are likely to move to the upside in early trading on Thursday, adding to the gains posted in the previous session. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 88 points.

The markets may continue to benefit from renewed optimism about a near-term interest rate cut following Federal Reserve Jerome Powell's Congressional testimony.

Powell told lawmakers that crosscurrents, such as trade tensions and concerns about global growth, have continued to weigh on the U.S. economic outlook since the central bank's June meeting.

The Fed chief pointed out that increased uncertainties about the economic outlook and muted inflation pressures led the central bank to pledge after the June meeting to "act as appropriate to sustain the expansion."

Powell noted that many meeting participants saw that the case for a somewhat more accommodative monetary policy had already strengthened.

"Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook," Powell said in his prepared remarks.

Powell is scheduled to testify before the Senate Banking Committee this morning, although his prepared remarks will likely mirror those he delivered on Wednesday.

The stock futures showed little reaction to a Labor Department report showing an unexpected uptick in U.S. consumer prices in the month of June.

The Labor Department said its consumer price index inched up by 0.1 percent in June, matching the slight increase seen in May. Economists had expected consumer prices to come in unchanged.

Excluding food and energy prices, core consumer prices rose by 0.3 percent in June after inching up by 0.1 percent for four consecutive months. Core prices had been expected to edge up by 0.2 percent.

A separate Labor Department report showed first-time claims for U.S. unemployment benefits unexpectedly fell in the week ended July 6th.

The report said initial jobless claims dropped to 209,000, a decrease of 13,000 from the previous week's revised level of 222,000. Economists had expected jobless claims to inch up to 223,000.

Stocks gave back some ground after an early move to the upside but managed to remain mostly positive throughout the trading session on Wednesday. The major averages all reached record intraday highs, although only the Nasdaq managed to end the session at a record closing high.

The Dow rose 76.71 points or 0.3 percent to 26,860.20, the Nasdaq advanced 60.80 points or 0.8 percent to 8,202.53 and the S&P 500 climbed 13.44 points or 0.5 percent to 2,993.07.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index climbed by 0.5 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index is up by 0.1 percent, the U.K.'s FTSE 100 Index is down by 0.1 percent and the German DAX Index is down by 0.3 percent.

In commodities trading, crude oil futures are inching up $0.07 to $60.50 a barrel after spiking $2.60 to $60.43 a barrel a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,418.40, up $5.90 compared to the previous session's close of $1,412.50. On Wednesday, gold jumped $12.

On the currency front, the U.S. dollar is trading at 108.21 yen compared to the 108.46 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1272 compared to yesterday's $1.1251.

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