US Stocks Forecast: Wall Street drops again although bulls have upper hand

Wall Street ended lower on Thursday and the S&P 500 and Dow Jones Industrial Average are now down four straight days. 

The Dow was lower by 0.43%, the S&P 500 was down 0.46% and the NASDAQ was off by 0.38%.

Weekly jobless claims fell to a near 18-month low, allaying fears of a slowing economic recovery, but also stoking worries the Fed could move sooner than expected to scale back its accommodative policies.

The Labor Department said initial claims for state unemployment benefits dropped 35,000 to a seasonally adjusted 310,000 for the week ended Sept. 4, the lowest level since mid-March 2020.

That suggested that job growth could be hindered by labour shortages rather than cooling demand for workers.

In other news, ECB President, Christine Lagarde, presented an upbeat assessment of euro area growth after 

The ECB ‘moderately’ lowered the pace of PEPP purchases for Q4. This keeps all options open for December when we expect PEPP to be retired in favour of “more standard” unconventional stimulus.

The inflation projections were revised up, but not to the extent that they sound hawkish.

Overall, the market is range-bound ahead of the Federal Reserve this month, wondering when the Fed  will scale back massive measures enacted last year to shield the economy from the coronavirus pandemic.