Dow Jones Expected to Drop Four Times in a Row
After 2.98 million more Americans filed initial jobless claims last week, Dow futures pointed to a fall tomorrow. The Dow Jones Industrial Average declined by 2.2%, extending its streak to 4.5% through three sessions.
Not only that, the S&P 50 and Nasdaq were also down for the past two days. Today’s performance will send the outperforming Nasdaq into its first negative state in 2020.
The downturn is expected to take place because of the Federal Reserve chair’s recent comment. According to Jerome Powell, the country still needs to do more to support its economy amid the coronavirus crisis.
Nonetheless, he also considered that US growth should still recover once the pandemic is “under control.”
Biggest Moves Today
The biggest increase today was from Dow Jones’ Cisco Systems, which adjusted its quarterly profit of 79 cents per share. This exceeded the stock market expectation of 10 cents.
Cisco also beat market expectations for its revenues, which showed how the coronavirus economy gives the company an advantage. Companies involved in remote work are still expected to perform the best.
Allogene Therapeutics also saw a surge in the premarket. The clinical-stage immune-oncology company released positive data from the first phase of its study for its non-Hodgkin lymphoma treatment.
Meanwhile, Tesla is still expected to see its stocks fall after CEO Elon Musk forced its main US car plant to open. The company’s human resources head threatened workers in the factory in Fremont, California that they could lose unemployment benefits.
The reopening was in defiance of the county’s health orders.
Reports of Amazon’s wage increase and double overtime pay for workers ending on May 30 will also drive stocks downward. The company continues to face intense criticism for ending its unlimited unpaid time off policy.
Wall Street Awaits Jobless Claims
Any changes in stock trading will depend on the Labor Department’s latest update on more jobless claims. Although, economists expect Dow Jones to dive deeper, with a 2.7 million initial claims filed through the week.
That said, it could point to another historic spike in jobless claims in history. Last week, the same report saw 3.169 million people filing for benefits, which brought it to 33.5 million in total.
Stock futures pointed to more declines in the US equity markets for Thursday morning. Dow futures are expected to fall by near-100 points on Thursday to open a possible 95-point decline.
Powell will drive Dow Jones down more than 500 today, and it looks like it will face a similar slump in the near-term.
