Stock futures were narrowly mixed during Thursday night’s extended session, indicating that Wall Street would not open much change on Friday, with key benchmarks struggling with the ongoing impact of the coronavirus on the economy and the potential for a policy change by the Federal Reserve.
Shares ended Thursday’s regular session on a mixed note, removing stubbornly high unemployment data and Federal President Jerome Powell’s commitment to push inflation higher.
Tech stocks, which have pushed the broader market to fourth consecutive record-closing highs, took a blow as traders posted profits on Amazon (AMZN), Apple (AAPL) – which have risen to new records. Facebook (FB), and Alphabet (GOOG, GOOGL) have also posted their highest closing levels ever.
Although the Nasdaq snapped up a five-day winning streak, the broader S&P 500 Index closed its fifth record, closing 6 days in a row. On an intraday basis, the Dow reversed all of its 2020 losses shortly before ending modestly higher. It is now just over 1,000 points away from the February high.
In a close speech at Jackson Hole, Wyoming, Powell unveiled a new mindset for the central bank that will tolerate inflation “moderately” above its 2% target. The Fed is also committed to reviewing this policy every five years. The Fed chief warned that the maintenance of low inflation over the last eight years risks new economic difficulties.
“On the one hand, with the framework review out of the way, it gives the Fed something to do in September. [Open Market Committee] meeting: introducing new, more aggressive advances, ”said JPMorgan Chase economist Michael Feroli.
“On the other hand, the lack of comments from Powell on actions to support the new strategy may indicate that the Committee is satisfied with the amount of monetary support they are already providing to the economy,” he added.
Meanwhile, Microsoft (MSFT) and Walmart (WMT) got a boost when reports emerged that the two giants were close to a joint agreement to buy out TikTok, the secure viral video app at the heart of national security. CNBC reported that the retail giant has partnered with Microsoft to buy the platform, in the wake of the TikTok CEO’s dismissal. A deal could close as soon as this week, CNBC reported.
On Thursday, investors received the final reading on the job market, as another 1 million Americans first applied for unemployment insurance benefits last week. The impact of the coronavirus pandemic continues to reverberate across the economy, with the report back-to-weeks showing that unemployment claims marked above 1 million, after a brief break below that level earlier in August.
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18:03 hrs ET Thursday: Stock futures mixed at start of extended trading
Here were the key movements in stock markets, starting at 6:15 p.m. ET:
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S&P 500 futures (ES = F): 3488.00, up 2.75 points
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Dow futures (YM = F): 28,501, up 33 points
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Nasdaq futures (NQ = F): 11947,75, part 5 points
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