Stock futures in negative territory on Thursday, after a report on U.S. jobless claims, which remained near multidecade lows, pointed to continuing recovery in the labor market.
The level of jobless claims remained “very benign but may be bottoming out after quite a multiyear fall from the peak in March 2009,” said Peter Boockvar, chief market analyst at The Lindsey Group, in emailed comments after the release.
But the news didn’t shake off some jitters in the market, as investors continued to assess minutes of the Federal Open Market Committee and concluded there may be a few more hawks than they had expected.
Connor Campbell, financial analyst at SpreadEx said an April interest-rate hike is off the table, but “the fact that there appears to be a slight increase in the number of hawks in the central bank (with some members open to an April hike) may have spooked investors,” in a note to clients.
A fresh drop in oil prices also weighed on sentiment, while investors plowed money into gold and the yen.
Dow Jones Industrial Average YMM6, -0.66% futures were down 80 points, or 0.4%, to 17,551, while S&P 500 futures ESM6, -0.66% fell 10 points, or 0.5% to 2,050. Nasdaq-100 futures NQM6, -0.55% lost 18 points, or 0.4%, to 4,517.
The moves came after U.S. stocks closed solidly in the green on Wednesday, boosted by higher oil prices and minutes from the Fed’s latest policy meeting, which showed a reluctance among members to raise interest rates as soon as April.
The prospects of a dovish Fed and a Bank of Japan that may not intervene to support its currency, sent the dollar to fresh 18-month lows against the yen USDJPY, -1.53% The pair last traded around ¥108.r3, at levels not seen since late October 2014, and sharply below the ¥109.79 seen late Wednesday in New York.
All the normal ingredients for an equities rally are there—dovish Fed, small lift in oil prices—but markets have also been dealing with hefty volatility since the start of the year to mid-February, said Brenda Kelly, head analyst, London Capital Group.
“We remain at the mercy of the oil market and decisions on freezing or cutting on April 17th in Doha will likely set the tone for equity markets too,” said Kelly, in emailed comments. Oil prices CLK6, -1.14% traded flat on Thursday, erasing an earlier lead.
She said potential for corporate defaults is another factor that appeared to be hitting sentiment. The next wave of such defaults could hit investors harder than ever, Bloomberg reported on Thursday.
In his annual letter to shareholders, J.P. Morgan Chase & Co. JPM, -0.92% Chief Executive James Dimon warned that increased market volatility is likely here to stay, even as he argued that his firm is getting progressively stronger and safer.
Data docket: Consumer credit for February is due at 3 p.m. Eastern.
Federal Reserve Chairwoman Janet Yellen will hold conversations with former Federal Reserve Chairmen Ben Bernanke and Alan Greenspan at the International House in New York City at 5:30 p.m. Eastern.
Kansas City Fed President Esther George will speak on the economy in York, Nebraska at 8:15 p.m. Eastern.
L Brands Inc.’s LB, +0.80% Victoria’s Secret announced layoffs as part of a restructuring that will also cut some of its merchandise categories.
Other markets: The Stoxx Europe 600 SXXP, -0.24% turned lower, after minutes from the European Central Bank’s policy meeting showed policy makers didn’t rule out further rate cuts and judged there was “little evidence of negative side effects” of subzero rates.
In Asia, the Nikkei 225 index closed slightly higher. The Shanghai Composite Index SHCOMP, -1.38% slid 1.38% as investors fretted over a three-month ban on large shareholders selling domestic stocks that is about to expire soon.
Gold prices GCM6, +1.42% surged $15.90, or 1.3%, to $1,240 an ounce