Dow Futures Dip As Investors Brace For Powell's Remarks, Data Deluge: Strategist Warns of Fragile Bull Market

U.S. stock futures pointed to a negative opening on Thursday after the previous session's mixed performance. The broader market has been on a three-session winning run, thanks to the tech-fueled rally. However, ongoing uncertainties around tariffs and interest rates could leave traders wary of further upside.

The signals from Federal Reserve officials point to a "wait-and-watch" approach by the central bank. 

San Francisco Fed President Mary Daly said at an event held late Wednesday that the economy is on solid footing, reinforcing the central bank's ability to respond to government initiatives on taxes, trade, tariffs, immigration, and deregulation.

As of 9:50 p.m. ET, the S&P 500, Nasdaq 100, Dow, and Russell 2000 futures were down 0.19%, 0.10%, 0.39%, and 0.08%, respectively.

Crude oil and gold futures extended their slide overnight, and the U.S. dollar is weaker against its major global counterparts.

The benchmark 10-year Treasury's yield, which topped 4.5% on Wednesday, gained an additional 1.2 points in overnight trading.

Asian stocks were mostly lower early Thursday, with Japan's Nikkei 225 average slipping over 1% on the strength of the yen.

Thursday's economic calendar is heavily loaded, with market-moving data on tap. Among the noteworthy reports are:

• Weekly jobless claims report (8:30 a.m. ET)
• April Retail sales report (8:30 a.m. ET)
• April producer prices report (8:30 a.m. ET)
• Empire Manufacturing Survey's May business conditions index (8:30 a.m. ET)
• Philadelphia Fed's May diffusion index of business activity (8:30 a.m. ET)
• Fed's April industrial production report (9:15 a.m. ET)
• National Association of Home Builders' May homebuilder confidence index (10 a.m. ET)
• March business inventories report (10 a.m. ET)

Also on the radar are a couple of speeches by central bank officials. Fed Chair Jerome Powell will discuss key issues in monetary policy and the economy at the Thomas Laubach Research Conference in Washington, D.C., at 8:40 a.m. ET. Fed Governor Michael Barr is due to speak at 2:05 p.m. ET.

Notable earnings for the day include those from Walmart (WMT), Alibaba (BABA), Canadian Solar (CSIQ), Deere (DE), NetEase (NTES), Applied Materials (AMAT), Doximity (DOCS) and Take-two Interactive (TTWO).

Tech stocks once again shone the brightest on Wednesday, driven by renewed optimism about artificial intelligence (AI) technology.

The tech-heavy Nasdaq Composite hovered above the unchanged line throughout the session before ending solidly higher, and the S&P 500 Index moved listlessly but ending modestly higher. 

On the other hand, the Dow Jones Industrial Average retreated for a second straight session, with the breadth markedly negative.

In a recent note, Morgan Stanley Chief Investment Officer Lisa Shalett said that investors are pinning their hopes for a new bull market on the potential for corporate tax cuts, financial services deregulation, and the U.S. economy avoiding stagflation.

"However, such developments are far from certain and would come amid investor concerns about U.S. debt, political uncertainty, and global instability," she added.

The Invesco QQQ Trust (QQQ) ETF ended Wednesday's session up 0.60% at $518.68, and the SPDR S&P 500 ETF (SPY) added 0.13% before closing at $587.59. On the other hand, the SPDR Dow Jones Industrial Average ETF Trust (DIA) fell 0.23% to $420.55.

The iShares Russell 2000 ETF (IWM) retreated a steeper 0.89% to $206.78.

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