U.S. Stocks May Move Back To The Upside After Yesterday’s Sell-Off

Stocks may move to the upside in early trading on Thursday, regaining ground following the sell-off seen in the previous session. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.4 percent.

Some traders may see the steep drop seen on Wednesday as a buying opportunity amid optimism the markets will resume the upward trend seen throughout much of January.

While the Federal Reserve’s signals that an interest rate cut in March is unlikely contributed to yesterday’s nosedive, economists continue to believe it is a matter of “when, not if” the central bank will eventually lower rates.

CME Group’s FedWatch Tool is currently indicating a relatively modest 37.5 percent chance of a March rate cut but a nearly 100 percent chance rates will be lower by early May.

A continued decrease by treasury yields may also generate buying interest on Wall Street, with the yield on the benchmark ten-year note falling to its lowest levels in almost a month

Potentially adding to optimism about the outlook for rates, the Labor Department released a report showing first-time claims for U.S. unemployment benefits unexpectedly saw a modest increase in the week ended January 27th.

The Labor Department said initial jobless claims rose to 224,000, an increase of 9,000 from the previous week’s revised level of 215,000.

Economists had expected jobless claims to edge down to 212,000 from the 214,000 originally reported for the previous week.

On Friday, the Labor Department is scheduled to release its more closely watched report on employment in the month of January.

Economists currently expect employment to increase by 180,000 jobs in January after jumping by 216,000 jobs in December, while the unemployment rate is expected to inch up to 3.8 percent from 3.7 percent.

Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of January.

The ISM’s…