By Peter Nurse
Investing.com -- U.S. stocks are seen opening lower Thursday, continuing the previous month’s selling as worries about an economic downturn stemming from aggressive Federal Reserve interest rate hikes persist.
At 07:00 ET (11:00 GMT), the Dow Futures contract was down 150 points, or 0.5%, S&P 500 Futures traded 24 points, or 0.6%, lower and Nasdaq 100 Futures dropped 105 points, or 0.9%.
The main Wall Street indices closed lower Wednesday, the fourth down session in a row, and suffered their biggest monthly percentage declines in August since 2015.
The Dow Jones Industrial Average dropped 280 points, or 0.9% on Wednesday, falling 4.1% in August, while the S&P 500 fell 0.8% and the Nasdaq Composite 0.6%, down 4.2% and 4.6% on the month, respectively.
September is historically a weak month for stocks, and further losses are likely today as investors worry about the Federal Reserve tightening monetary policy to such an extent that the U.S. economy gets pushed into recession.
Cleveland Fed President Loretta Mester stated Wednesday that the central bank needs to raise its benchmark rate above 4% by early next year, from the current target range of 2.25-2.50%, and leave it there for some time to help cool inflation.
The next major economic report comes Friday with the government's release of August jobs data. Ahead of that, the weekly data on jobless claims are due at 08:30 ET (12:30 GMT), which follows Wednesday's private payroll reading from ADP showing a lower than expected increase in jobs.
Also due, at 10:00 ET, is the ISM manufacturing PMI release for August, which is expected to show a slowing of the sector’s expansion rate.
Quarterly earnings are due from the likes of semiconductor manufacturing company Broadcom (NASDAQ:AVGO), athletic apparel maker Lululemon Athletica (NASDAQ:LULU), and Hormel Foods (NYSE:HRL).
Additionally, Nvidia (NASDAQ:NVDA) stock fell over 5% premarket after the chip designer warned that U.S. officials telling it to stop exporting two top computing chips for artificial intelligence work to China would hit its business in the country.
Oil prices weakened Thursday, falling to a two-week low after China’s Caixin manufacturing PMI, a gauge of private-sector manufacturing activity, fell back into contraction territory last month, indicating COVID difficulties were hitting the world’s second largest economy in the world.
The city of Chengdu – capital of Sichuan province and home to 21 million people – went into lockdown overnight.
The economic woes of the largest importer of crude in the world have outweighed any short-lived support from a surprising 3.3 million barrel drop in U.S. crude stocks last week.
By 07:00 ET, U.S. crude futures traded 2.3% lower at $87.52 a barrel, while the Brent contract fell 2.4% to $93.36. Both benchmarks slumped near 7% over the last month, falling by more than 20% in the three months through August.
Additionally, gold futures fell 0.8% to $1,712.30/oz, while EUR/USD traded 0.4% lower at 1.0020.