US stocks poised for mild bounce, with Tesla in focus

Wall Street stocks looked headed for a mild bounce at the open Thursday, as investors continued to decipher the Federal Reserve’s policy signals and braced for another batch of corporate earnings.

Likely to see action are shares of Tesla Inc., Square Inc. and other companies that released results after hours on Wednesday, while DowDuPont Inc and Kellogg’s are on the earnings list early today.

Updates on weekly jobless claims and nonmanufacturing activity are the key economic data ahead, in the runup to the closely watched monthly jobs report Friday.

What are the main benchmarks doing?

Dow Jones Industrial Average futures YMM8, +0.13% were up 39 points, up 0.2%, to 23,860, while S&P 500 futures ESM8, +0.19% were up 4.3 points, or 0.2%, to 2,631.75. Nasdaq-100 futures NQM8, +0.16% turned higher, rising 8 points, 0.1%, to 6,641.50.

The major U.S. equity indexes fell Wednesday after the Federal Open Market Committee signalled few policy changes. The Dow Jones Industrial Average DJIA, -0.72% closed 174.07 points, or 0.7%, lower at 23,924.98. The S&P 500 index SPX, -0.72% lost 0.7% to 2,635.67, while the Nasdaq Composite Index COMP, -0.42% declined 0.4% to 7,100.90.

Read:History suggests the stock market isn’t overly expensive right now

What’s driving markets?

Investors were continuing to weigh the next move from the Federal Reserve, which on Wednesday acknowledged U.S. inflation is ticking higher, bolstering hopes for a faster pace of interest rate hikes this year than previously planned.

Check out:Why is the Fed more worried about inflation? Look at these rising price gauges

And read:How the Fed decides if the economy is headed to a recession

Rate hikes bring in the prospect of higher borrowing costs for corporations and consumers, as well as strengthening in the dollar, which can all send ripples through global stock markets.

Investors will be on the alert for developments from Beijing, where U.S. and Chinese officials are meeting for discussions on tariffs and other trade issues. Worries about trade hostilities between the top two global economies have roiled financial markets in recent months.

What are strategists saying?

“Further patience is required before the Fed publicly commits to any adjustments in the expected policy path for 2018, leaving markets to trade at the mercy of speculative headlines and animal spirits for another day,” said Sophia Ferguson, a senior portfolio manager at State Street Global Advisors, in a note.

Which economic data are in focus?

Weekly jobless claims data are due for release at 8:30 a.m. Eastern Time, as investors begin to look ahead to the nonfarm payrolls report on Friday.

As the U.S. and China begin their trade summit, an update on the March trade deficit is on the docket at 8:30 a.m. Eastern, expected to narrow to $49.4 billion from $57.6 billion in February. First-quarter readings on productivity and unit labor costs are scheduled for release at the same time.

At 9:45 a.m. Eastern, the Markit services purchasing managers’ index for April is due, followed by the Institute for Supply Management’s nonmanufacturing index 15 minutes later. Also at 10 a.m. Eastern come data on factory orders in March.

Check out:MarketWatch’s Economic Calendar

Which stocks are in focus?

DowDuPont Inc.DWDP, +0.68% , Cigna Corp.CI, +0.75% , Blue Apron Holdings Inc.APRN, +0.00% , Kellogg Co.K, -3.57% and New York TimesNYT, +0.31% are expected to report earnings ahead of the open.

Tesla Inc.TSLA, +0.41% shares lost more than 4% in late trading Wednesday. The electric-car maker beat expectations for adjusted losses and sales in its quarterly earnings, but shares dropped during a long conference call in which Chief Executive Elon Musk gave analysts and the media the cold shoulder.

Read:Elon Musk acted like a jerk, and Tesla stock paid the price

Kraft Heinz Co.KHC, -2.69% shares rallied more than 5% late Wednesday after topping Wall Street estimates.

FireEye Inc.FEYE, +0.92% slumped 10% in late trade, even after the security software maker lifted its full-year guidance as sales beat forecasts.

Square Inc. SQ, +0.95% dropped 6% late Wednesday. The payments company posted earnings and shed light on its spending plans and bitcoin business.

In its first report as a public company, Spotify Technology SASPOT, +3.11% reported an earnings miss. The digital music service company’s shares tumbled 6% in late trade.

Fitbit Inc.FIT, +0.00% rose slightly in late trading. The wearable devices company beat earnings expectations, but disappointed with its outlook.

After the markets close, companies including Herbalife Nutrition Ltd.HLF, -0.35% , Activision Blizzard Inc.ATVI, +0.87% , Xerox Corp.XRX, -9.01% and GoPro Inc.GPRO, +1.22% are expected to release their quarterly financial updates.

Don’t miss:Why the stock market is unimpressed by the best Q1 results in 24 years

What are other markets doing?

European stocks SXXP, -0.26% fell. Asian stocks were largely in the red, led by a 1.3% drop for Hong Kong’s Hang Seng Index HSI, -1.34% .

Gold prices GCM8, +0.57% were up 0.5%, while U.S. oil futures CLM8, +0.04% rose 0.4%. The ICE U.S. Dollar Index DXY, -0.28% was slightly lower at 92.386.

Read:Global gold demand drops to lowest in a decade

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