US pre-open: Futures slightly lower following S&P 500 and Nasdaq's record closes

(Sharecast News) - Wall Street futures were in the red ahead of the bell on Thursday following solid gains in the previous session. As of 1225 GMT, Dow Jones futures were down 0.06%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.05% and 0.09% softer, respectively.

The Dow closed 308.51 points higher on Wednesday after Federal Reserve chairman Jerome Powell said the US economy was now strong enough to give the central bank room to move carefully on rate cuts.

Trade Nation's David Morrison said: "Fed Chair Jerome Powell spoke yesterday evening. He said the economy was stronger than it looked back in September when the Fed slashed rates by 50 basis points. The big move came on the back of disappointing payroll numbers which were later revised higher. Mr Powell said that that the central bank could be a bit more cautious when it came to cutting rates. Despite this, the CME's FedWatch Tool showed a small increase in the probability of a 25 basis point rate cut later this month, rising to 74% from 70%. Earlier this week, Fed member Christopher Waller had said he was open to another cut at the December meeting.

"So, investor sentiment remains positive, and everyone expects a rally into Christmas. There's been a sharp increase in leveraged positions and option plays favouring a continuation of the rally, and it rather feels as if everyone has rushed to the same side of the boat. History tells us that in these situations, it's wise to wear a lifejacket."

On the macro front, Challenger, Gray & Christmas job cuts data will be out at 1230 GMT, while weekly jobless claims and October's goods trade balance figures will be published at 1330 GMT.

In the corporate space, shares in clothing retailer American Eagle traded lower on the back of weak forward guidance, while shares in discount retailer Five Below headed south as a result of better-than-expected Q3 earnings.

Dollar General and Kroger were slated to report earnings before the open, while Hewlett Packard will post its latest quarterly numbers after the close.

Reporting by Iain Gilbert at Sharecast.com