Dow Futures 120 Pts Lower; Fed Minutes, Bitcoin in Focus

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By Peter Nurse – U.S. stocks are seen opening lower Thursday, on course for the fourth straight day of losses amid worries about future Federal Reserve policy as well as volatility in the cryptocurrency prices.

At 7:05 AM ET (1205 GMT), the contract was down 120 points, or 0.4%, traded 11 points, or 0.3%, lower, and dropped 27 points, or 0.2%.

Wall Street closed lower Wednesday, for the third day in a row, after a volatile session, with the broad-based falling 0.3%, the blue-chip 0.5% and the tech-heavy ending only marginally lower. 

Investors have been digesting the from the April Federal Reserve meeting which suggested that some FOMC members were considering voting for tapering the central bank’s asset purchase programs in upcoming meetings.

Worries that the Fed may begin to rein in its ultra-easy monetary policies fairly promptly because of resurgent inflation have weighed on the stock market of late. The Nasdaq Composite, which is dominated by high-growth tech stocks, is down almost 5% in May so far. It’s also on course for its fifth consecutive down week, a run that hasn’t been seen since October/November of 2012.

Also causing anxiety has been the dramatic volatility in the cryptocurrencies, following a regulatory crackdown in China and as well as the talk of Fed tightening. , the largest of these digital currencies, fell as much as 30% on Wednesday to $30,000 before rebounding to currently trade just short of $40,000.

In corporate news, Cisco (NASDAQ:) stock is down sharply premarket after the tech company issued weaker-than-expected earnings guidance for the current quarter, and warned that supply chain issues will linger through the end of 2021.

The retail sector will remain in focus Thursday after L Brands (NYSE:), the parent of Victoria’s Secret, reported first-quarter earnings and sales that topped estimates, continuing the sector’s trend of strong numbers as shoppers returned to stores and spent their stimulus money. The likes of Kohls (NYSE:) and BJs Wholesale Club Holdings (NYSE:) are set to release earnings before the open.

Investors will also keep an eye on the weekly to gauge the pace of labor-market recovery. New claims for unemployment benefits are expected to total 450,000, a new post-pandemic low, a drop from last week’s 473,000.

Oil prices weakened Thursday as traders digested the prospect of entering the market. This follows Iranian President Hasan Rouhani claiming that a framework agreement had been reached on restoring the 2015 UN-backed deal limiting its nuclear programs, which would allow his country to restart exporting crude.

futures traded 1.6% lower at $62.37 a barrel, while the contract fell 1.7% to $65.50.

Additionally, fell 0.7% to $1,869.05/oz, just below the four-month high reached the previous session, while traded 0.2% higher at 1.2195.