The major U.S. index futures are pointing to a lower opening on Thursday, with the negativity continuing in the wake of the release of a report showing an unexpected increase in first time claims for unemployment benefits. Safe haven bets such as gold and the dollar are gaining ground, reflecting the increasing risk aversion among traders. The major averages are in a precarious position when analyzed from the technical perspective.
The Dow is ensconced between its 200 and 50-day moving averages and may find difficulty breaking either of these barriers. However, if the selling gains momentum and the average breaks below its downside support, another steep sell-off may be on the cards.
U.S. stocks succumbed to broad based selling pressure on Wednesday, as comments from the Federal Reserve re-ignited concerns about a possible stalling of growth. The major averages opened sharply lower and showed a gradual downward movement throughout the session to close notably lower.
The Dow Industrials ended down 265.42 points or 2.49% at 10,379 and the S&P 500 Index declined 31.59 points or 2.82% to close at 1,090, while the Nasdaq Composite Index closed 68.54 points or 3.01% lower at 2,209, its worst closing level since July 21st.
All thirty of the Dow components closed lower, with Boeing (BA), Alcoa (AA) Pfizer (PFE), 3M Co. (MMM), Hewlett-Packard (HPQ), JP Morgan (JPM), General Electric (GE), Disney (DIS), DuPont (DD), Bank of America (BAC) and Caterpillar (CAT) declining sharply in the session.
Among the sector indexes, the KBW Bank Index fell 4.32%, the NYSE Arca Airline Index slipped 4.50% and the Dow Jones Transportation Average lost 4.27%. The Dow Jones Basic Materials Average, the NYSE Arca Broker/Dealer Index, the Philadelphia Housing Sector Index and the Philadelphia Oil Service Index all ended down over 3.50%. In the tech space, the Philadelphia Semiconductor Index receded 4.26% and the NYSE Arca Networking Index dropped 3.79%.
On the economic front, the Commerce Department reported that the U.S. trade deficit widened to $49.9 billion in June, marking the biggest deficit since October 2008. The second quarter GDP growth is now likely to be downwardly revised by a significant percentage. Exports fell 1.3% month-over-month, reflecting slowing global growth, while imports rose 3% to their highest level since October 2008.
Currency, Commodity Markets
Crude oil futures are receding $1.13 to $76.89 a barrel after declining $2.23 to $78.02 a barrel on Wednesday. The decline in the previous session came amid the equity market decline and the release of the weekly inventory report, which showed that crude oil stockpiles fell by 3 million barrels to 355 million barrels in the week ended August 6th. Despite the decline, crude oil stockpiles remained above the upper limit of the average range.
Gasoline inventories rose by 0.4 million barrels and remained above the upper limit of the average range. Distillate inventories also rose, increasing by 3.5 million barrels. Inventories of distillate fuel remained above the upper boundary of the average range for this time of the year. Refinery capacity utilization averaged 88.1% over the four weeks ended August 6th compared to 91.2% in the previous week.
Gold futures, which rose $1.20 to $1,199.20 an ounce in the previous session, are currently advancing an incremental $8.90 to $1,208.10 an ounce.
Among currencies, the U.S. dollar is trading at 85.445 yen compared to the 85.22 yen it fetched at the close of New York trading on Wednesday. The U.S. dollar is valued at $1.2815 against the euro compared to yesterday's $1.2864.
Asia
The major Asian markets retreated on Thursday, hurt by the weaker sentiment that prevailed on Wall Street overnight, as growth concerns pre-occupied the minds of traders.
Japan's Nikkei 225 average opened notably lower and languished in negative territory for the rest of the session. While the index pared back some losses, it still closed down 80.26 points or 0.86% at 9,213, its lowest level since July 2nd. Most sectors, with the exception of defensive utility and some technology and resource stocks, declined in the session.
In economic news, the Cabinet Office reported that Japan's consumer confidence slipped slightly in July following a gradual recovery in the past six months. The consumer sentiment index fell to 43.4 from 43.6 in June. At the same time, the revised industrial production report released by the Ministry of Economy, Trade and Industry showed that industrial production for June was upwardly revised to show a 1.1% drop compared to the 1.5% decline estimated initially.
Australia's All Ordinaries opened moderately lower and dropped sharply in early trading before moving sideways at lower levels for the rest of the session. In addition to macroeconomic concerns, some disappointing earnings also weighed on sentiment. The index closed down 57.30 points or 1.28% at a 1-month low of 4,422. Energy, material and healthcare stocks receded sharply in the session.
A report released by the Australian Bureau of Statistics showed that Australia's unemployment rate rose unexpectedly in July. The unemployment rate rose to a seasonally adjusted 5.3% in July from 5.1% in June. Analysts had expected the unemployment rate to record no change.
At the same time, the number of jobs added during the month climbed more than expected, which suggests that more people joining the labor force may have triggered the rise in the unemployment rate.
Hong Kong's Hang Seng Index opened lower and showed mostly sideways movement before closing down 188.83 points or 0.89% at 21,106. Thirty-nine of the forty-three index components closed lower.
Meanwhile, the emerging market of India reported that its industrial production grew 7.1% year-over-year in June following the revised 11.3% increase in May. A year ago, industrial output was up 8.3%. Among the industrial sub-sectors, manufacturing output rose 7.3% in June compared to an 8% increase last year. Meanwhile, mining output growth slowed to 9.5% from 14.2% in the previous year.
Europe
The major European averages are declining on Thursday, extending their losses for a third straight session. Yesterday, the major averages in the region slumped notably. The French CAC 40 Index and the German DAX Index are moving down 0.98% and 0.44%, respectively, while the U.K.'s FTSE 100 Index is receding 0.05%.
In corporate news, U.K. insurer Prudential reported that its first half operating profit rose 41% to 968 million pounds, aided by a strong performance in Asia. The company also raised its interim dividend by 5%.
Brewer Anheuser-Busch InBev reported a profit of $1.5 billion for its second quarter, higher than $1.07 billion last year. The profit growth came even though revenues dipped to $9.17 billion from last year's $9.5 billion.
Eurostat reported that the euro area's industrial production dropped 0.1% month-over-month in June. This was in contrast to economists' expectations for a 0.6% increase and was the first decline in four months. It followed an upwardly revised 1.1% rise in May. On an annual basis, industrial production was up 8.2%, slower than May's revised 9.9% growth.
U.S. Economic News
Adding to recent concerns about the job market, the Labor Department released a showing that first-time claims for unemployment benefits unexpectedly saw a modest increase in the week ended August 7th.
The report showed that initial jobless claims rose to 484,000 from the previous week's revised figured of 482,000. Economists had been expecting jobless claims to fall to 465,000 from the 479,000 originally reported for the previous week.
A Labor Department report showed that import prices rose 0.2% month-over-month in July, reversing some of the 1.3% drop in the previous month. The rebound was supported by a 2.1% increase in fuel import prices, while non-fuel import prices continued to decline, dropping 0.3% in the month.
At the same time, export prices edged down by 0.2% in July following a revised 0.7% increase in the previous month. Agricultural export prices edged down 0.1%, while non-agricultural export prices slid 0.2%.
Stocks in Focus
Earnings
Cisco (CSCO) reported fourth quarter non-GAAP earnings of 43 cents per share, up 39% year-over-year, and net sales of $10.8 billion, up 27% year-over-year. The consensus estimates called for earnings of 42 cents per share on revenues of $10.88 billion. In the conference call that followed the earnings release, the company said it expects first quarter revenue growth of 18%-20%, translating to revenues of $10.64 billion to $10.82 billion, which trails the consensus estimate of $10.95 billion.
Advance Auto Parts (AAP) reported that its second quarter earnings rose to $1.16 per share from 83 cents per share last year, as sales rose to $1.42 billion from the year-ago's $1.32 billion. Analysts estimated earnings of $1.03 per share on revenues of $1.41 billion. The company also said its board authorized a $300 million share repurchase program.
Brinker (EAT) reported that its fourth quarter adjusted earning from continuing operations fell to 44 cents per share from 45 cents per share last year. Revenues rose to $743.1 million from $742.1 million last year. Analysts' estimates, which typically exclude one-time items, called for earnings of 46 cents per share on revenues of $677.81 million.
Sara Lee (SLE) said its fourth quarter adjusted earnings from continuing operations fell to 19 cents per share from 26 cents per share last year. Net sales rose to $2.77 billion from $2.66 billion last year. The consensus estimates called for earnings of 16 cents per share on revenues of $2.86 billion.
Other Corporate News
GlaxoSmithKline (GSK) could be in focus after it said a FDA advisory committee has unanimously concluded that clinical studies provide evidence of the effectiveness of ezogabine, an investigational epilepsy drug it jointly develops with Valeant Pharma (VRX).
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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.