Market Snapshot: U.S. stock futures climb after solid data, ECB announcement

U.S. stock futures pointed to a positive open on Thursday, as the European Central Bank left its key lending rates unchanged and announced that it plans to end its bond-buying program at the end of the year.

A flurry of stronger-than-expected economic data also lent support to futures.

What are markets doing?

Futures for the Dow Jones Industrial Average YMU8, +0.30%  rose 84 points to 25,292, while those for the S&P 500 index ESU8, +0.24% rose 9.5 points to 2,788.5. Futures for the Nasdaq-100 index NQU8, +0.30%  rose 28 points, or 0.4%, to 7,259.

The upbeat trading action came after declines on Wednesday, when the main benchmarks ended near session lows. Stocks fell after the Fed raised interest rates and struck an unexpectedly hawkish tone for the rest of 2018. The central bank hinted at two more hikes this year, rather than the one additional move that had previously been predicted

The Dow DJIA, -0.47%  fell 0.5%, while the S&P 500 SPX, -0.40%  dropped 0.4% and Nasdaq Composite Index COMP, -0.11%  ended 0.1% lower.

What is driving the market?

Central bank activity was the primary driver of the day. Meeting just a day after the Fed lifted interest rates for the second time this year, the ECB was in the spotlight on Thursday after it left interest rates unchanged and laid out plans to taper its program of monthly bond purchases later this year. The central bank is aiming to bring them to a halt by the end of 2018.

Aside from the central banks, trade worries continued to be on traders’ minds on Thursday. President Donald Trump’s administration is preparing to announce tariffs on tens of billions of dollars in Chinese goods as early as Friday, a move that is feared to trigger retaliatory action by China.

What’s on the economic calendar?

Retail sales nationwide jumped by 0.8% last month, twice as high as the MarketWatch forecast.

U.S. import prices jumped 0.6% in May, while import prices excluding fuel rose 0.2%.

New jobless claims dropped by 4,000 to 218,000 in the latest week. The more stable monthly average of new claims dipped by 1,250 to 224,250.

Business inventories for April are due at 10 a.m.

What are analysts saying?

“Four rate hikes for 2018 does not necessarily suggest that the end of the great bull market is at hand, but it has been enough to knock equities back this morning. After years of stasis in central banks, the developments are coming positively thick and fast,” said Chris Beauchamp, chief market analyst at IG, in a note.

Which stocks are in focus?

Shares of Tailored Brands Inc. TLRD, -2.76%  tanked 18% ahead of the bell after the retailer late Wednesday reported comparable sales below analyst forecasts.

21st Century Fox Inc. FOX, +7.48%  added 2.4% in premarket trading after Comcast Corp. CMCSA, -0.19%  on late Wednesday offered to buy a big chunk of Fox’s entertainment and international assets for $65 billion. That offer was about 19% higher than Walt Disney Co.’s DIS, +1.90%  offer. Disney shares were 0.4% lower before Thursday’s market open, while Comcast shares didn’t move.

Adobe Systems Inc. ADBE, +1.40%  is slated to report earnings after the market closes.

What are other markets doing?

Stocks in Asia closed lower across the board as traders there reacted to the Fed decision. The People’s Bank of China decided not to follow the Fed in raising interest rates, defying expectations that the Chinese policy makers would follow their usual pattern and respond with small hikes to Fed moves.

Europe was also covered in red, with the Stoxx Europe 600 index SXXP, +0.47%  down 0.5%.

The dollar perked up against most other major currencies, sending the ICE U.S. Dollar Index DXY, +0.59%  0.2% higher to 93.889.

Crude oil prices CLN8, +0.57%  were higher, while gold GCQ8, +0.79%  gained 0.8%.

U.S. yields were mostly lower, with the 10-year Treasury rate TMUBMUSD10Y, -0.99%  down 3.6 basis points at 2.953%.

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