Stock futures exhibited minimal changes on Thursday following the Dow’s third consecutive day of losses. Dow futures experienced a slight decline of 21 points, representing a 0.06% decrease. Simultaneously, S&P 500 futures showed marginal stability, while Nasdaq 100 futures saw a modest increase of 0.26%.
In the aftermath of Discover’s after-hours trading, the company witnessed a 9% decline in its shares. The credit card entity disclosed an elevation in its net charge-off rate during the fourth quarter when compared to the preceding year. Despite this, Discover outperformed expectations with fourth-quarter revenue reaching $4.20 billion, surpassing the projected $4.10 billion according to analysts surveyed by LSEG.
Wall Street is recuperating from a session marked by losses in major averages, largely influenced by rising Treasury yields. On the prior day, the Dow, consisting of 30 stocks, experienced a reduction of 94.45 points, equivalent to a 0.25% decline. Similarly, the S&P 500 and Nasdaq Composite reported declines of 0.56% and 0.59%, respectively.
During the session, the 10-year Treasury yield surpassed the 4.1% mark, instigating concerns among investors. The strong December retail sales report, indicative of a robust consumer base, raised apprehensions that the Federal Reserve might implement fewer rate cuts than anticipated. Presently, the market is estimating a 56% likelihood of a quarter percentage point rate cut in March, as per the CME FedWatch Tool.
Chris Toomey, the managing director at Morgan Stanley, expressed concerns about the market’s response, stating that while it is positive that the Fed is not discussing rate hikes, the market’s anticipation of six rate cuts poses a challenge. Toomey noted that the market performance in the fourth quarter involved a considerable amount of chasing, and now investors are reevaluating their positions with potential concerns about rising rates leading to selling by weak hands.
Looking ahead, Thursday’s economic agenda includes weekly jobless claims, housing starts and building permits data, along with a scheduled speech by Atlanta Fed President Raphael Bostic.