Dow Futures Wobble With Central Bank Policy Back in Focus—and What Else Is Happening in the Stock Market Today

Central bank policy is top of mind for Wall Street.

Angela Weiss/AFP via Getty Images

Stocks wobbled on Thursday as investor attention returned to central bank policy, with a speech from Federal Reserve Chairman Jerome Powell and what likely will be a historic interest-rate hike in Europe expected in the day ahead.

Futures for the Dow Jones Industrial Average retreated 40 points, or 0.1%, after the index rallied 435 points to close at 31,581 on Wednesday. S&P 500 futures fell 0.2% and the tech stock-heavy Nasdaq was poised to slip 0.1%.

Overseas, the pan-European Stoxx 600 was 0.2% higher and Tokyo’s Nikkei 225 advanced 2.3% as investors in Asia followed Wall Street’s rally in the previous session.

The major U.S. indexes snapped a multi-day losing streak with their gains on Wednesday, with declines in both Treasury yields and oil prices easing some of the pressure off investors. 

“The modest revival in U.S. stocks come after several weeks of intense selling pressure, which had pushed the index around 9% below its recent peak,” said Mark Haefele, the chief investment officer at UBS Global Wealth Management. “Rebounds are to be expected following such a swift decline. However, we don’t currently see the conditions for a sustained improvement in equity market sentiment.”

This remains a tough period for stocks, and catalysts remain before Friday, which will either see the indexes snap their three-week losing streak or notch a fourth consecutive week of losses.

Central banks were in focus Thursday, with a monetary policy decision due from the European Central Bank and the latest speech from the Fed chairman. Investors are laser-focused on the Fed, which has moved to aggressively tighten financial conditions this year in a bid to get multi-decade high inflation under control, battering the stock market and raising the risk of recession.

When Powell spoke at the Jackson Hole economic conference less than two weeks ago, it proved to be a major catalyst that sent stocks lower as the central banker outlined a stalwart commitment to fighting inflation with higher rates.

“Readers could be forgiven for losing track of the various themes in markets right now,” said Jim Reid, a strategist at Deutsche Bank, adding that recent commodity price declines have raised hopes that the Fed and other central banks could ease up on rate hikes into next year.

“Today could put that narrative under pressure however,” Reid said. “There’s a decent chance we’ll see the largest European Central Bank hike in their history, and we’re also set to hear from Fed Chair Powell in his last appearance before the next [Fed monetary policy] meeting.”

Write to Jack Denton at