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U.S. Stocks May Give Back Ground After Yesterday's Relief Rally

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Following the late-day rally seen in the previous session, stocks may move back to the downside in early trading on Thursday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 172 points.

Traders may cash in on the strong gains posted on Wednesday, which came after the Federal Reserve raised interest rates by 50 basis points but Fed Chair Powell was less hawkish than some had feared.

"A 75 basis point increase is not something that committee is actively considering," Powell said during his post-meeting press conference. "I think expectations are that we'll start to see inflation, you know, flattening out."

Lingering concerns about inflation, the economic outlook and the ongoing war in Ukraine may contribute to a pullback on Wall Street.

However, traders may be reluctant to make significant moves ahead of the release of the Labor Department's closely watched monthly jobs report on Friday.

With the monthly jobs report looming, the Labor Department released a report this morning showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended April 30th.

The report showed initial jobless claims rose to 200,000, an increase of 19,000 from the previous week's revised level of 181,000.

Economists had expected jobless claims to inch up to 182,000 from the 180,000 originally reported for the previous week.

A separate report from the Labor Department showed a substantial pullback in labor productivity in the first quarter of 2022.

The Labor Department said labor productivity plunged by 7.5 percent in the first quarter, reflecting the largest decline since the third quarter of 1947.

After showing a lack of direction for much of the session, stocks moved sharply higher going into the close of trading on Wednesday. The major averages all showed substantial moves to the upside, adding to the gains posted early in the week.

The major averages finished the session just off their best levels of the day. The Dow jumped 932.27 points or 2.8 percent to 34,061.06, the Nasdaq surged 401.10 points or 3.2 percent to 12,964.86 and the S&P 500 spiked 124.69 points or 3 percent at 4,300.17.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday, with the markets in Japan and South Korea closed for holidays. China's Shanghai Composite Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets have all shown strong moves to the upside on the day. While the French CAC 40 Index has shot up by 1.8 percent, the U.K.'s FTSE 100 Index is up by 1.6 percent and the German DAX Index is up by 1.5 percent.

In commodities trading, crude oil futures are jumping $1.36 to $109.17 a barrel after spiking $5.40 to $107.81 a barrel on Wednesday. Meanwhile, after edging down $1.80 to $1,868.80 an ounce in the previous session, gold futures are surging $36.20 to $1,905 an ounce.

On the currency front, the U.S. dollar is trading at 129.87 yen versus the 129.09 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0552 compared to yesterday's $1.0622.

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