On Thursday, futures on US stock indices slightly rose after yesterday's turbulent trading amid Fed representatives' statements. Futures on the Dow Jones Industrial Average gained 105 points or 0.3%. S&P 500 and Nasdaq 100 futures added 0.4% and 0.6% respectively.
A decline in oil prices boosted stocks. WTI and Brent fell by about 2% each. In addition, there is pressure on the oil market. Saudi Arabia may increase oil production after the EU ban on the Russian oil supply by 90%. Obviously, lower oil prices may also lead to lower fuel prices in the US. It can slightly reduce the burden on the US economy, which is on the verge of recession.
As a result of yesterday's session, the main indices showed losses. On Wednesday, the Dow Jones index lost 176.89 points or 0.5%. The S&P 500 fell by almost 0.8% and the Nasdaq Composite dropped by 0.7%.
Market sentiment is worsening as many investors are expecting more problems in the economy amid the Fed's policy and Russia's military special operation in Ukraine. Although Russia's actions are mostly damaging the eurozone economy, the surge in energy prices is damaging the US economy as well.
The market remains bearish and has quite a big potential for further decline after the observed weekly correction. The recent bounce and the pause indicate that there are no more buyers even at the current lows. The market requires reaching new yearly support levels. Inflation and the Fed's actions to raise interest rates remain the main problems that are keeping the market from hitting the bottom. Supply chain problems and disruptions in the agricultural markets may push prices even higher.
The ADP employment report is scheduled for today. Shortly before that, the Labor Department will release weekly jobless claims data.
Premarket
Shares of travel companies that stand to benefit the most from falling fuel prices gained the most in premarket trading today. American Airlines, Carnival Corp, and MGM Resorts increased by about 1% in the premarket.
Shares of pet retailer Chewy added as much as 15% after the company reported strong quarterly results. Apparel retailer PVH is up by 4%.
Leading giant Hewlett Packard Enterprise showed a drop of 6% after the company reported a slight decline in both profits and revenues.
The S&P 500 technical picture
If bulls are more active and prevent the asset to drop below $4,122, their target will be located at the resistance of $4,157. Yesterday, they failed to reach this target. However, the market may face corrections at the beginning of June, especially in the bullish trend we are observing. A breakthrough of $4,157 may trigger an uptrend to the area of $4,197 and $4,234. If a pessimistic mood and high inflation risks prevail amid Fed representatives' speeches, as well as bulls being weak at $4,122, we may see major profit-taking and a sell-off followed by a decline to $4,089. A decline in the trading instrument below that level is likely to push it to new lows of $4,050 and $4,013, with a target in the area of $3,975.