Here are the most important news, trends and analysis that investors need to start their trading day:
- Stocks set to fall after Wall Street's Fed-driven decline
- Central bankers indicate two rate hikes in 2023, no QE change
- Powell says jobs, inflation goals happening somewhat faster
- 11 Republican senators back bipartisan infrastructure plan
- CureVac tanks nearly 50% after disappointing Covid vaccine data
1. Stocks fall to slip after Wall Street's Fed-driven decline
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Dow futures dropped more than 100 points Thursday, one day after the 30-stock average closed off 265 points, or nearly 0.8%, as the Federal Reserve moved up its timetable on interest rate hikes. The Dow on Wednesday afternoon had been down as much as 382 points during Fed Chairman Jerome Powell's post-meeting news conference, which started 30 minutes after the 2 p.m. ET release of the central bank's policy statement and projections. Like the Dow, the S&P 500 and Nasdaq saw their lows of the day around the same time. But their lower closes were less severe. The S&P 500 and Nasdaq remained less than 1% away from Monday's record closes. The Dow was more than 2% away from its last record close in early May.
2. Central bankers indicate two rate hikes in 2023, no QE change
Money Report
The Fed on Wednesday left rates unchanged and made no mention of adjusting its massive Covid-era bond-buying quantitative easing program. Looking ahead, central bankers indicated two rate hikes in 2023. In March, they had expected no rates increases until at least 2024. The Fed on Wednesday also raised its inflation expectation to 3.4%, a full percentage point higher than the March projection. Wednesday's post-meeting policy statement continued to say that inflation pressures are "transitory," even as the most recent data on wholesale and consumers prices showed inflation surging a pace not seen in more than a decade. The 10-year Treasury yield ticked higher and lower Thursday morning, trading on either side of 1.57%. It was just below 1.5% moments before the Fed announcements.
3. Powell says jobs, inflation goals happening somewhat faster
Powell said progress toward the Fed's dual employment and inflation goals were happening somewhat faster than expected. Central bankers raised their GDP expectations for this year to 7% from 6.5% previously. Their unemployment rate estimate remained unchanged at 4.5%. Taking a step back from Covid-era lows, the Labor Department reported Thursday morning that initial jobless claims rose to 412,000 last week. Economists had expected 360,000. Two weeks ago, new filings for unemployment benefits went below 400,000 for the first time since March 2020.
4. 11 Republican senators back bipartisan infrastructure plan
A bipartisan senators' group working on a $1 trillion infrastructure compromise has more than doubled to 21 members, a key threshold giving momentum to their push as President Joe Biden returns from overseas at a pivotal time for his big legislative priority. Eleven Republicans senators joined the effort. In the evenly split Senate, conservative West Virginia Democrat Joe Manchin, who supports the bipartisan measure, has stressed he wants to pass a package with GOP votes. Biden wants a bigger bill, more like what he proposed in his trimmed-down $1.7 billion American Jobs Plan. Leaving Geneva after Wednesday's meeting with Russian President Vladimir Putin, Biden said he has not seen the bipartisan bill yet, but his chief of staff believes "there's some room" for a deal with Republicans.
5. CureVac tanks nearly 50% after disappointing Covid vaccine data
CureVac shares plunged nearly 50% in Thursday's U.S. premarket, the morning after the German biopharma firm released disappointing preliminary results for its Covid vaccine candidate. It demonstrated an interim efficacy of 47% against the disease "of any severity," missing the main goal and throwing in doubt the potential delivery of hundreds of millions of doses to the European Union. While late-stage trials of the more than 90% effective Pfizer-BioNTech and Moderna vaccines were conducted when the original version of the coronavirus was dominant, real-world data has so far suggested only somewhat weaker protection against the new variants.
— The Associated Press and Reuters contributed to this report. Follow all the market action like a pro on CNBC Pro. Get the latest on the pandemic with CNBC's coronavirus coverage.
