US pre-open: Stocks seen weaker as investors digest Fed, earnings

US futures pointed to a slightly lower open on Thursday as investors continued to mull over the Federal Reserve’s policy statement and sifted through more earnings releases.

At 1210 GMT, Dow Jones Industrial Average futures were down 0.2%, while S&P 500 and Nasdaq futures were 0.3% weaker.

Meanwhile, West Texas Intermediate was up 0.5% to $54.15 a barrel and Brent crude was 0.7% firmer at $57.23.

The Fed stood pat on rates on Wednesday and sounded a positive note on the economic outlook.

Jamieson Blake, retail sales manager at ADS Securities, said: “After some brief respite yesterday morning, futures prices are suggesting that Wall Street is set to resume its slide lower when trading resumes in a few hours time. The Federal Reserve may have painted an upbeat picture of the economy last night and although there was a slightly less hawkish undertone, the door is still very much open for a rate hike in the near term as attempts are made to manage inflationary pressures. Although this could be adding some downside pressure to stocks, ultimately the uncertainty over US foreign policy seems to be casting the bigger shadow here – and this looks set to linger for a considerable time yet.

“Economic data is a little more limited today, although the ADP payroll survey has very much paved the way for a solid jobs report tomorrow. In terms of earnings, its Amazon that is the stand out play today and with indications suggesting that online continues to win out over bricks & mortar, expectations will be running high.”

Market participants were also likely to keep watching out for any Trump-related headlines following reports on Wednesday that he has threatened to send US troops to Mexico to keep “bad hombres” from coming into the US.

Estee Lauder was on the back foot following third-quarter results, while Merck nudged a touch lower despite its fourth-quarter numbers topping analysts’ expectations.

US-listed shares of Deutsche Bank retreated after the German lender posted a €1.9bn net loss for the fourth quarter, falling short of expectations as legal costs took their toll.

Facebook was up in pre-market trade after it reported better-than-expected fourth-quarter earnings late on Wednesday, while Philip Morris gained ground on well-received fourth-quarter results.

Still to come, Amazon and Chipotle Mexican Grill are due to report earnings after the closing bell. On the data front, initial jobless claims are at 1330 GMT.