Investing.com - U.S. stock futures were subdued on Thursday following mixed trading in the previous session, as markets attempt to gauge the effect of President Donald Trump’s tariff agenda on economic activity. The European Central Bank is tipped to cut interest rates at its latest meeting, although traders are wondering if officials could signal a shift into a more neutral policy phase in the months ahead. U.S. jobless claims data is also due out, with markets looking ahead to the release of the crucial nonfarm payrolls report on Friday.
1. Futures muted
U.S. stock futures hovered around the flatline, with investors assessing a raft of labor market data this week and awaiting a key interest rate decision from the European Central Bank.
By 03:31 ET (07:31 GMT), the Dow futures contract, S&P 500 futures , and Nasdaq 100 futures were all mostly unchanged.
The main averages on Wall Street notched a narrowly mixed close in the prior session. The benchmark S&P 500 was broadly flat, while the tech-heavy Nasdaq Composite rose and the blue-chip Dow Jones Industrial Average declined.
Sentiment was dented by data which suggested that Trump’s tariff agenda was beginning to have an impact on the U.S. economy. Both private payrolls growth and a tracker of the key services sector missed expectations, and a snapshot of the world’s largest economy from the Federal Reserve said activity had dropped as the levies put upward pressure on prices.
Meanwhile, a doubling of tariffs on steel and aluminum to 50% by the Trump administration came into effect on Wednesday, even as optimism remains that the U.S. and a host of other nations will reach deals to avoid the imposition of punishing -- albeit delayed -- import duties in July. Of particular interest is a potential discussion between Trump and Chinese counterpart Xi Jinping sometime this week, which investors hope could ease trade tensions between the world’s two largest economies.
2. ECB decision ahead
The European Central Bank is widely expected to slash interest rates at its latest policy meeting on Thursday, particularly after recent data showed that inflation in the euro zone currency area eased below the ECB’s target level last month.
Since last June, the central bank has cut borrowing costs seven times, reacting to an economy grappling with tepid wage growth and weak activity -- two possible signs of cooling price pressures.
Headline consumer price inflation in the 20 countries using the euro eased to 1.9% in May, below expectations for 2.0%, thanks to sliding energy prices and declining services costs. In the prior month, the figure came in at 2.2% in the prior month.
So-called "core" inflation, which strips out volatile items like food and fuel, also decelerated to 2.3% from 2.7%, data from Eurostat, the European Union’s statistics agency, found.
Even with inflation edging below the ECB’s 2% target, a 25-basis point reduction to the central bank’s deposit rate to 2.0% this week is all but priced in by markets.
Still, debate could be more heated than investors currently think, analysts at ING said in a note to clients. They added that "while there are plenty of reasons for the ECB to continue cutting rates", more hawkish policymakers will "no doubt find some arguments for putting their foot on the brakes".
3. Jobless claims in focus
Highlighting the U.S. portion of the economic calendar today will be the latest jobless claims figures, which will tack on to a list of labor market data released this week.
Economists anticipate that the weekly number of Americans filing for first-time unemployment benefits inched down to 236,000, down from 240,000 in the week ended on May 24.
Separate reports earlier this week found that U.S. private employers added fewer jobs than anticipated in May, in a sign of potential cooling in the labor market as companies grapple with uncertainty around Trump’s tariff policies. Elsewhere, job openings grew in April, although layoffs increased, potentially indicating some softening in demand for workers.
But the data points largely serve as a precursor to Friday’s all-important monthly nonfarm payrolls report, which is projected to show that the U.S. added 130,000 jobs in May -- falling from 177,000 in April.
4. Broadcom (NASDAQ: AVGO ) to report
Broadcom will headline the slate of corporate earnings on Thursday, with the semiconductor group potentially set to provide a fresh glimpse into the state of demand for cutting-edge artificial intelligence chips.
Some investors have flagged worries that businesses could be reining in spending on AI as they face up to a murky economic outlook, while others have raised questions over the necessity of the expenditures following the emergence of a low-cost model from China’s DeepSeek earlier this year. However, major tech companies have recently backed their plans to pour heavy investments into the nascent technology.
In March, Broadcom’s CEO moved to assuage these fears, predicting that the company would log $4.4 billion in second-quarter revenue from its AI semiconductors, fueled by hyperscale customers shelling out cash on custom AI chips for data centers.
Broadcom has been bolstered by demand for these customized chips, especially from cloud-computing firms aiming to find alternative sources for processors beyond those designed by AI-darling Nvidia (NASDAQ: NVDA ).
Elsewhere, cloud data manager Rubrik and athleisure wear retailer Lululemon Athletica (NASDAQ: LULU ) are set to be among the companies joining Broadcom in reporting after the closing bell on Wall Street.
5. Oil rises
Oil prices steadied Thursday after recent losses as an outsized build in U.S. gasoline and distillate inventories raised demand concerns in the world’s largest economy.
At 03:26 ET, Brent futures rose 0.5% to $65.17 a barrel, and U.S. West Texas Intermediate crude futures climbed by 0.4% to $63.09 per barrel.
Both benchmarks dropped over 1% on Wednesday after government data showed that U.S. oil inventories shrank by a bigger-than-expected 4.3 million barrels in the past week.
But gasoline inventories grew 5.2 million barrels, much more than expected, while distillate stocks also grew by a healthy 4.2 million barrels.
The readings raised some questions over demand in the world’s biggest fuel consumer, especially heading into the travel-heavy summer season.