NASDAQ 100, Dow Jones, S&P 500: Futures Slide after Fed Signals Rate Hikes; JetBlue Shares Weaken

Highlights

• Stock futures indicate bearish sentiment following Wall Street’s losses.
• JetBlue ends partnership, impacting market sentiment in the airline industry.
• Federal Reserve meeting minutes support potential interest rate hikes.

Overview

Stock futures inched lower early Thursday morning following a losing session on Wall Street. The shortened trading week resumed Wednesday after a break for the Fourth of July holiday, and the major indexes logged modest losses. The Dow Jones Industrial Average lost 129.83 points, or 0.38%, while the S&P 500 dipped 0.2%. The Nasdaq Composite finished 0.18% lower.

During the pre-market session on Thursday, futures tied to the Dow Jones Industrial Average are lower by 95 points, or 0.27%, signaling bearish sentiment in the market. S&P 500 futures fell 0.31% and Nasdaq-100 futures shed 0.41%, further indicating a cautious start to the day. These movements reflect the investors’ response to the previous day’s downward trend.

JetBlue Decision Pressures Airline Stocks

One notable development was JetBlue Airways‘ decision to end its partnership in the northeast U.S. with American Airlines and instead focus on Spirit Airlines. JetBlue’s shares inched lower in extended trading, while American Airlines’ shares experienced a slight decline. On the other hand, Spirit Airlines saw an increase of about 2%. This strategic shift in the airline industry might have influenced market sentiment towards these companies.

Fed Meeting Minutes:  Expect Rate Hikes

Additionally, Wall Street analysts closely analyzed the minutes from June’s Federal Reserve policy meeting. The findings revealed that most officials expressed support for more interest rate hikes in the future. Traders are currently pricing in a nearly 89% chance of a hike at the central bank’s upcoming meeting this month. Federal Reserve Chair Powell has emphasized his commitment to reaching the 2% inflation target, suggesting that additional hikes are likely in the third quarter of this year.

While inflation shows signs of cooling, experts believe it will take time to reach the target. Regardless, market participants remain cautious, as there hasn’t been enough evidence to suggest that the Federal Reserve will ease its monetary policy. Investors with aggressive positions are advised to consider taking profits during periods of market strength, according to industry experts.

Expected Impact From Economic Reports

Looking ahead, investors are awaiting key economic data, including ADP private payrolls data for June, initial jobless claims, and readings of S&P Global services PMI and ISM services PMI. These data points will provide further insights into the health of the economy and may impact the interest rate outlook.

Short-Term Outlook:  Cautious Trade

In summary, stock futures started the day on a bearish note, following a previous session of losses on Wall Street. The decision by JetBlue Airways to shift its partnership and the minutes from the Federal Reserve meeting have added to the cautious sentiment in the market. Traders are closely watching economic data releases for further indications of market direction.