Stocks may move to the downside in early trading on Thursday, extending the notable pullback seen over the two previous sessions. The major index futures are currently pointing to a modestly lower open for the markets.
Ongoing concerns about turmoil among regional banks may weigh on Wall Street, with shares of PacWest Bancorp (PACW) plummeting by 37.2 percent in pre-market trading.
The steep drop by PacWest comes after the company confirmed that it its reviewing strategic options, including a potential sale.
However, the bank said it has not experienced out-of-the-ordinary deposit flows following the sale of First Republic Bank (FRC) and other news.
Tennessee-based First Horizon (FHN) is also seeing substantial pre-market weakness after the regional lender and TD Bank (TD) announced they have called off their $13.4 billion merger agreement.
Overall trading activity may be somewhat subdued, however, as traders look ahead to the closely watched monthly jobs report on Friday.
Economists currently expect the report to show employment increased by 179,000 jobs in April after jumping by 236,000 jobs in March, while the unemployment rate is expected to hold at 3.5 percent.
With the Federal Reserve signaling future monetary policy decisions will be "data-dependent," the jobs report could have a significant impact on the outlook for interest rates.
A day ahead of the release of the monthly jobs report, the Labor Department released a showing first-time claims for U.S. unemployment benefits rose by slightly more than expected in the week ended April 29th.
The report said initial jobless claims climbed to 242,000, an increase of 13,000 from the previous week's revised level of 229,000.
Economists had expected jobless claims to rise to 240,000 from the 230,000 originally reported for the previous week.
A separate report released by the Commerce Department said the U.S. trade deficit shrank to $64.2 billion in March from a revised $70.6 billion in February.
The Labor Department also released another report showing U.S. labor productivity tumbled by much more than expected in the first quarter of 2023.
Stocks saw substantial volatility following the Federal Reserve's monetary policy announcement on Wednesday before eventually ending the session mostly lower. With the decrease on the day, the major averages added to the steep losses posted on Tuesday.
The major averages finished the session just off their worst levels of the day. The Dow slid 270.29 points or 0.8 percent to 33,414.24, the Nasdaq fell 55.18 points or 0.5 percent to 12,025.33 and the S&P 500 dropped 28.83 points or 0.7 percent to 4,090.75.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Thursday, with the Japanese markets remaining closed. China's Shanghai Composite Index climbed by 0.8 percent, while Australia's S&P/ASX 200 Index edged down by 0.1 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the French CAC 40 Index has slid by 0.8 percent, the U.K.'s FTSE 100 Index is down by 0.6 percent and the German DAX Index is down by 0.5 percent.
In commodities trading, crude oil futures are rising $0.29 to $68.89 a barrel after plunging $3.06 to $68.60 a barrel on Wednesday. Meanwhile, after advancing $13.70 to $2,037 ounce in the previous session, gold futures are climbing $8.20 to $2,045.20 an ounce.
On the currency front, the U.S. dollar is trading at 134.70 yen versus the 134.71 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1026 compared to yesterday's $1.1062.
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