U.S. Stocks May Move To The Downside In Early Trading

Following the mixed performance seen in the previous session, stocks may move to the downside in early trading on Thursday. The major index futures are currently pointing to a slightly lower open for the markets, with the S&P 500 futures down by 0.1 percent.

The downward momentum on Wall Street comes after President Donald Trump called for the U.S. military budget to be increased to $1.5 trillion in 2027.

“This will allow us to build the ‘Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe,” Trump said in a post on Truth Social.

While Trump’s proposal is likely to contribute to significant strength among defense stocks, it may also lead to concerns about the impact on the national debt.

“Watch the bond market closely as Trump’s proposal to radically increase defense spending could put even more pressure on the already sky-high U.S. national debt,” said Russ Mould, investment director at AJ Bell.

“While Trump insists any extra spending would be paid for by tariffs, bond markets might not be as convinced,” he added. “Equity markets are already looking a bit doubtful, with futures prices implying a red day for Wall Street.”

However, overall trading activity may be somewhat subdued as traders look ahead to the release of the Labor Department’s closely watched monthly jobs report on Friday.

Economists currently expect employment to increase by 60,000 jobs in December after climbing by 64,000 jobs in November. The unemployment rate is expected to edge down to 4.5 percent from 4.6 percent.

Ahead of the monthly jobs report, a report released by the Labor Department this morning showed first-time claims for U.S. unemployment benefits edged up by slightly less than expected in the week ended January 3rd.

The Labor Department said initial jobless claims crept up to 208,000, an increase of 8,000 from the previous week’s revised level of 200,000.

Economists had expected jobless claims to rise to 210,000 from the 199,000 originally reported for the previous week.

Stocks fluctuated over the course of the trading day on Wednesday before eventually ending the relatively lackluster session mixed.

While the Dow and the S&P 500 gave back ground after a positive start to the first full trading week of the new year, the tech-heavy Nasdaq showed a modest move to the upside.

The Nasdaq rose 37.10 points or 0.2 percent to 23,584.27, but the S&P 500 fell 23.89 points or 0.3 percent to 6,920.93 and the Dow slid 466.00 points or 0.9 percent to 48,996.08.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index tumbled by 1.6 percent, while Hong Kong’s Hang Seng Index slumped by 1.2 percent.

The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index is down by 0.3 percent, the German DAX Index is down by 0.2 percent and the French CAC 40 Index is down by 0.1 percent.

In commodities trading, crude oil futures are surging $1.07 to $57.06 a barrel after tumbling $1.14 to $55.99 a barrel on Wednesday. Meanwhile, after slumping $33.60 to $4,462.50 an ounce in the previous session, gold futures are falling $27.50 to $4,435 an ounce.

On the currency front, the U.S. dollar is trading at 156.84 yen versus the 156.76 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1667 compared to yesterday’s $1.1673.

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