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US stocks may not head for post-FED volatility


After seeing significant volatility at the end of the previous session, shares may continue to show a lack of direction in early trading on Thursday. Major index futures are currently pointing to a roughly flat open marketswhile S&P 500 futures were unchanged.

Traders may be reluctant to make big moves amid uncertainty about the near-term outlook for markets following the Federal Reserve’s third straight 75 basis point interest rate hike.

Although the Fed’s economic outlook provided a clearer outlook for future rate hikes, traders remain concerned about the impact of an aggressive rate hike on economy.

The Fed’s next meeting is more than a month away, giving traders plenty of time to analyze incoming economic data and try to gauge the impact of recent rate hikes.

Reports on inflation and the labor market are likely to be in focus in the coming weeks as traders look for signs that the Fed may change the aggressive plan that has been laid out.

This morning, the Labor Department released a report showing an increase in jobless claims for the week ended September 17.

The report showed that initial jobless claims rose to 213,000, up 5,000 from the previous week’s revised level of 208,000.

Economists had expected jobless claims to rise to 218,000 from 213,000 initially reported the previous week.

The modest increase came after jobless claims fell to their lowest level since the week ended May 28 the previous week.

Shortly after the start of trading, the Conference Board plans to release its report on leading economic indicators for August. The leading economic index is expected to be unchanged in August after falling 0.4 percent in July.

Stocks typically experience wild swings following the Federal Reserve’s monetary policy announcements, but there was particularly significant volatility following the central bank’s latest decision on Wednesday.

The major averages swung back and forth across the unchanged line before ending the day not far from their session lows.

The Dow fell 522.45 points, or 1.7 percent, to 30,183.78, the Nasdaq fell 204.86 points, or 1.8 percent, to 11,220.19, and the S&P 500 fell 66 points, or 1.7 interest to 3,789.93 points.

In a sharply lower close, the Dow fell to a three-month low, while the Nasdaq and S&P 500 fell to their lowest closing levels in more than two months.

In overseas trading, stock markets in the Asia-Pacific region were mostly lower during trading on Thursday. Japan’s Nikkei 225 fell 0.6 percent, while China’s Shanghai Composite fell 0.3 percent.

Major European markets also moved lower on the day. While Britain’s FTSE 100 index was down 0.2 percent, Germany’s DAX index and France’s CAC 40 index were down 0.6 percent.

In commodities trading, crude oil futures jumped $1.33 to $84.27 a barrel after falling $1 to $82.94 a barrel on Wednesday. Meanwhile, gold futures rose $7.80 to $1,683.50 an ounce after rising $4.60 to $1,675.70 an ounce in the previous session.

On the currency front, the US dollar is trading at 140.88 yen, up from 144.06 yen at the close in New York on Wednesday. Relative to the euro, the dollar is worth 0.9874 dollars against 0.9837 dollars yesterday.

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