S&P 500, Nasdaq Futures Relay Cautious Optimism As Fed Speeches Loom; Cisco Takes Off On Earnings

Futures trading during the premarket hours is suggesting cautious optimism for Wall Street on Thursday, following the tech-led pullback seen in the previous session.

On Wednesday, the major averages gap-opened lower and languished mostly below the flat line, although the FOMC minutes that suggested future rate hikes could be less steep helped cut some losses.

The Nasdaq Composite Index slumped by 1.25%, weighed down by the pullback in most large-cap tech stocks. Apple, Inc. AAPL bucked the downtrend with a 0.88% advance following twin price target revisions.

The short interest in the technology sector has increased by $30.9 billion since the market bottomed on June 16, the largest dollar increase in any other sector, S3 Partners analyst Ihor Dusaniwsky said in a recent report.

The Dow Industrials snapped a five-session winning streak before ending half a percentage point lower at 33,980.32. The S&P 500 Index — a broader market gauge, fell 0.72% to 4,274.04.

At the time of going to press, the S&P 500 and Nasdaq futures were up 0.16% and 0.13%, respectively. The Dow futures were advancing a more modest 0.11%.

“If there's anything wrong with the market, it's simply because it is August,” Navellier & Associates’ Louis Navellier said in a report.

He sees the second half of August to be lackluster, given the end of the earnings season, but expects the market to rally, going into the Labor Day weekend. This will likely be followed by some more consolidation, he added.

“I think if you're looking for a low point in the market, September 21st is looking like a good time to add money because the Fed might have their last rate increase,” the fund manager said.

See also: Short Sellers Are Ramping Up Their Bets Against Tech Stocks: Analyst Says This May Be A 'Bear Rally'

Thursday, investors get to react to the weekly jobless claims data and the results of a regional manufacturing survey, both due before the market opens for trading. The National Association of Realtors will release its existing home sales data for July at 10 a.m. ET.

That said, the focus will likely be on the two Fed speeches scheduled for the afternoon. Minneapolis Federal Reserve President Neel Kashkari and Kansas City Fed President Esther George will both make public appearances.

Networking giant Cisco Systems, Inc. CSCO is seen rallying following its quarterly results. The market also gets to digest more retail earnings.

Crude oil futures are higher for a second straight session.

Major Asian markets tracked the negative lead from Wall Street and ended Thursday’s session mostly lower. European stocks are recovering from the previous session’s sell-off.

In premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY was adding 0.11% to $427.14 and the Invesco QQQ Trust QQQ was moving up 0.04% to $328.61, according to Benzinga Pro data.