After an initial move to the downside, stocks have shown a lack of direction over the course of the trading day on Thursday. The major averages climbed off their early lows but have been bouncing back and forth across the unchanged line since then.
Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 48.66 points or 0.4 percent at 13,550.86, the S&P 500 is down 1.88 points or less than a tenth of a percent at 4,363.81 and the Dow is down 61.91 points or 0.2 percent at 33,889.61.
The choppy trading on Wall Street comes as traders express some uncertainty about the near-term outlook for the markets following recent weakness.
The major averages closed lower in each of the three previous sessions, with the Nasdaq and the S&P 500 pulling back off their best closing levels in over a year.
Uncertainty about the outlook for interest rates may also be contributing to the lackluster performance as Federal Reserve Chair Jerome Powell testifies on Capitol Hill for the second day.
While Powell and the Fed have signaled further interest rate hikes this year, traders continue to question whether the central bank will follow through.
Potentially adding to concerns about the outlook for rates, the Bank of England raised the interest rate more aggressively earlier in the day, hiking rates by a bigger-than-expected 50 basis points.
However, a report from the Labor Department showing initial jobless claims held at their highest level since October 2021 last week has helped offset the worries, as the Fed has warned about the impact of labor market tightness.
The report said initial jobless claims came in at 264,000, unchanged from the previous week’s revised level. Economists had expected jobless claims to edge down to 260,000 from the 262,000 originally reported for the previous week.
Reflecting the upward revision to the previous week, jobless claims held at their highest level since hitting 269,000 in the week ended October 23, 2021.
Banking stocks have shown a significant move to the downside on the day, dragging the KBW Bank Index down by 2.2 percent.
A sharp pullback by the price of crude oil is also weighing on energy stocks, as crude for August delivery is plunging $2.76 to $69.77 a barrel.
Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index is down by 2.1 percent, the NYSE Arca Natural Gas Index is down by 1.6 percent and the NYSE Arca Oil Index is down by 1.5 percent.
Commercial real estate, brokerage and telecom stocks are also seeing considerable weakness, while retail stocks have shown a strong move to the upside.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday, with markets in China, Hong Kong and Taiwan closed for the Dragon Boat Festival. Japan’s Nikkei 225 Index slid by 0.9 percent, while South Korea’s Kospi rose by 0.4 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.’s FTSE 100 Index has slumped by 0.9 percent, the French CAC 40 Index is down by 0.8 percent and the German DAX Index is down by 0.3 percent.
In the bond market, treasuries have slid firmly into negative territory after ending the previous session roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.6 basis points at 3.789 percent.
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