Futures dip on fears of prolonged economic downturn

FILE PHOTO: The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, U.S., April 26, 2020. REUTERS/Jeenah Moon

(Reuters) - U.S. stock index futures edged lower on Thursday following two sessions of sharp declines, as investors worried that the current economic downturn maybe be here for longer than initially presumed.

The stock market’s sharp rebound from March lows was driven by hopes of a pick up in business activity as several U.S. states eased lockdowns put in place to curb the spread of the coronavirus.

The three main stock indexes are now headed for their worst week since mid-March, as hopes of a quick economic recovery were dashed following sobering comments from Federal Reserve Chairman Jerome Powell and leading U.S. infectious disease expert Anthony Fauci.

Focus now shifts to weekly jobless claims, which likely totaled 2.5 million for the week ended May 9 in what would be the third straight month of massive job losses.

The data is expected at 8:30 a.m. ET (1230 GMT).

Among early movers, Cisco Systems Inc CSCO.O rose 2.5% premarket after beating quarterly revenue and profit estimates, as lockdowns globally boosted demand for its remote-work tools and networking equipment.

The earnings season is in its final stretch with 448 S&P 500 companies having reported so far. On average, first-quarter earnings are expected to fall 12.2%, according to Refinitiv data.

At 6:12 a.m. ET, Dow e-minis 1YMcv1 were down 77 points, or 0.33%. S&P 500 e-minis EScv1 were down 7.75 points, or 0.28% and Nasdaq 100 e-minis NQcv1 were down 3.5 points, or 0.04%.

SPDR S&P 500 ETFs SPY.P were down 0.3%.

Reporting by Medha Singh and Ambar Warrick in Bengaluru; Editing by Shounak Dasgupta