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Stock futures fall amid Fed’s concerns about the economy, Nvidia shares decline

U.S. stock futures fell Thursday, a day after the S&P 500 touched briefly another record high, amid concerns about the economic recovery as the coronavirus pandemic drags on.

Dow Jones Industrial Average futures fell 61 points, or 0.2%. The move indicated a loss of about 57 points at the open. S&P 500 futures shed 0.2%. Nasdaq-100 futures dipped 0.1%.

Here’s what traders are watching this morning:

  • Futures pared some of their losses after the announcement of imminent trade talks between the U.S. and China. China’s commerce ministry announced early on Thursday that Washington and Beijing will be back around the negotiating table in the coming days, thinning the earlier losses in premarket trade.
  • The S&P 500 touched a record high during the Wednesday’s regular session, but then closed lower after the Federal Reserve released its July meeting minutes which said, “the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term.” 
  • Nvidia shares pulled back by 0.7% in premarket trading even after reporting blowout results. A better-than-expected 50% jump in revenue last quarter still wasn’t enough to lift the stock, which has doubled this year. Investors are growing concerned about valuations for high flying tech shares.
  • Intel shares gained 3.9% after the company announced an accelerated buyback plan, calling its stock cheap.
  • Investors will receive an update on the U.S. jobless situation later in the morning, when the Labor Department is scheduled to release its weekly report on unemployment claims. Economists polled by Dow Jones estimate that 923,000 first-time applicants filed for unemployment benefits during the week ended Aug. 15.

On Wednesday, the S&P 500 fell 0.4% to 3,374.85 while the Dow Jones Industrial Average slid 85.19 points, or 0.3%, to close at 27,692.88. The Nasdaq Composite lagged, falling 0.6% to 11,146.46. 

The Fed’s comment knocked the S&P 500 from a new intraday record set on Wednesday. The benchmark closed at a new record high on Tuesday, confirming the start of a new bull market. The Dow and Nasdaq also turned negative after the minutes were released.

Apple made history on Wednesday as the iPhone maker became the first U.S. company to reach a market cap of $2 trillion. With that milestone, Apple officially doubled its valuation in just over two years. The stock is up nearly 60% in 2020 and remains responsible the market’s rally off its springtime low. Apple shares were higher slightly in premarket trading Thursday.

Investors will be watching closely the upcoming jobless claims report. Last week, the government reported that first-time claims for unemployment insurance last week fell below 1 million for the first time since March 21. Those collecting benefits for at least two weeks, known as continuing claims, totaled nearly 15.5 million, according to the Labor Department’s prior claims report.

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