US STOCKS-Wall St set for muted open as weak earnings offset jobless claims relief

Money market traders are pricing in U.S. rate cuts worth 47 basis points (bps) by the end of 2024, according to LSEG's rate probabilities app, up from 44 bps before Thursday's data. The jobless claims data dragged down yields on 10-year Treasury notes, the benchmark for global borrowing costs, which had risen in the previous session and pressured equities.

U.S. stock indexes were set for a muted open on Thursday as a slate of downbeat earnings offset the impact of data that showed U.S. weekly jobless claims rose more than expected, indicating softening labor market conditions.

Initial claims for state unemployment benefits increased 22,000 to a seasonally adjusted 231,000 for the week ended May 4, the Labor Department said. Economists polled by Reuters had forecast 215,000 claims in the latest week. The data followed last week's softer-than-expected payrolls numbers that fueled bets that the Federal Reserve will cut interest rates sometime this year.

"Whenever we have an employment number that is weaker and it doesn't meet our expectations, ironically, that bolsters the markets because the data was in favor of a rate cut rather than a rate hike," said Peter Andersen, founder of Andersen Capital Management. Money market traders are pricing in U.S. rate cuts worth 47 basis points (bps) by the end of 2024, according to LSEG's rate probabilities app, up from 44 bps before Thursday's data.

The jobless claims data dragged down yields on 10-year Treasury notes, the benchmark for global borrowing costs, which had risen in the previous session and pressured equities. But the optimism was countered by some disappointing earnings reports.

Chip designer Arm Holdings tumbled 6.7% in premarket trading as its full-year revenue forecast came in below expectations. Bigger rival Nvidia slipped marginally. Warner Bros Discovery slid almost 3% after it reported a larger-than-expected quarterly loss, as its cable TV unit reported a slump in ad sales and the studio segment struggled due to Hollywood strikes and poor sales of "Suicide Squad" videogame.

Roblox slumped 27% after the video-gaming platform cut its annual bookings forecast, in a sign that people were dialing back on spending amid an uncertain economic outlook and elevated levels of inflation. By 8:48 a.m. ET, S&P 500 e-minis were down 3.5 points, or 0.07%. Nasdaq 100 e-minis fell 3.25 points, or 0.02%, while Dow e-minis dipped 74 points, or 0.19%.

Robinhood Markets gained 7% after the online brokerage beat estimates for first-quarter profit, thanks to robust crypto trading volumes and rate hikes that boosted its net interest revenue. Airbnb slid 8.2% after the vacation rental company forecast second-quarter revenue below market expectations, stoking fears of slowing growth.

Investors will focus on San Francisco Fed President Mary Daly's speech later in the day for clues on U.S. rate path. Boston Fed President Susan Collins on Wednesday expressed confidence that the current setting of monetary policy will slow the economy in a way she believes will be necessary to get inflation back to the Fed's 2% target.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)