Fed Effects, Jobless Claims, Kroger Report: 3 Things to Watch

By Dhirendra Tripathi

Investing.com — Stocks tumbled after the Federal Reserve’s latest interest rate decision, which held steady but pointed to rate hikes down the road. They later recovered some of their lost ground.

Cyclical stocks, which tend to move in tandem with an improving economy, were also lower, though financials pared their losses as bank stocks rose. Financial firms can make more money when rates rise.  

The Fed’s announcement on Wednesday sent a jolt of electricity through a market that had been waffling in recent days. Another factor could have been the conclusion of a summit meeting between President Joe Biden and Russian President Vladimir Putin.

Biden told reporters in Switzerland after the meeting that he told Putin “we need to have some basic rules of the road,” including infrastructure that should be off limits to cyberattacks, adding he called on Putin to respect human rights. 

Here are three things that could affect markets tomorrow:

1. Fed effects

Markets reacted negatively on Wednesday after the Federal Reserve kept interest rates and monthly bond buying steady, though it signaled that two rate hikes could be in the cards by the end of 2023. Investor wariness could continue into Thursday, but markets have proven themselves to be resilient before even the face of seemingly contrary news. 

2. Unemployment claims

Federal Reserve Chairman Jerome Powell told reporters Wednesday afternoon that he expected to see strong job creation over the summer months. On Thursday, we get weekly data that could support that view. , a measure of people receiving unemployment benefits for a while, are expected to fall to 3.430 million in the week ending June 12, from 3.499 million a week before.

The number of individuals who filed for insurance for the first time in the U.S. is seen falling to 359,000 for the week ending June 5, the fewest since the pandemic began and beating 376,000 for the week before. Both numbers are due out at 8:30 AM ET (1230 GMT).

3. Kroger earnings

Consumers have noted rising prices for food and other basic household items. At the same time, retailers have grappled with rising wages and worker shortages. One big food retailer — Kroger Company (NYSE:) — reports earnings for the most recent period tomorrow. Analysts tracked by Investing.com expect first-quarter EPS of 98 cents on revenue of $39.56 billion.