US Stocks Likely To Open Lower After A Brief Respite: 'Add Exposure To Equities' Amid Pullback, Says Expert

U.S. stock futures fell again on Thursday after a brief respite on Wednesday, following a softer-than-expected inflation print. Futures of all four benchmark indices declined in premarket trading.

President Donald Trump imposed the promised 25% tariffs on steel and aluminum imports on Wednesday. In response, Canada imposed 25% retaliatory tariffs on the U.S. steel imports and raised taxes on other items, whereas the European Union also retaliated with tariffs on American beef, poultry, bourbon, motorcycles, peanut butter, and jeans.

Meanwhile, the 10-year Treasury yield stood at 4.32%, while the two-year yield was at 3.98%. According to the CME Group's FedWatch tool, there is a 97% chance that the Federal Reserve will keep interest rates unchanged for the March meeting.

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, dropped in premarket on Thursday. The SPY was down 0.21% to $557.72, and the QQQ also declined 0.31% to $475.43, according to Benzinga Pro data.

Cues From The Last Session

Fueled by strong gains in consumer discretionary, information technology, and communication services, U.S. stocks closed mixed on Wednesday.

Indices rose after inflation data revealed a larger-than-expected slowdown, with February’s Consumer Price Index dipping to 2.8%. Core inflation also dropped more than anticipated, easing from 3.3% to 3.1%.

Tech giants Nvidia Corp. (NASDAQ:NVDA) and Tesla Inc. (NASDAQ:TSLA) led the charge, while consumer staples and healthcare sectors lagged.

As of Wednesday’s close, the S&P 500 had fallen 8.92% and the Dow Jones 8.26% from their 52-week highs. The Nasdaq 100 and Nasdaq Composite were still in the correction territory, dropping 11.82% and 12.65%, respectively, from their recent peaks.

Insights From Analysts

“The opportunity has arrived with the current pullback,” said Scott Wren, the senior global market strategist at Wells Fargo Advisors. He had been advising the investors to exercise patience and wait for the right time to buy equities.

“We see the current pullback as an opportunity to add exposure to equities and suggest that clients bring their U.S. Mid-cap exposure up to a favorable (overweight) allocation relative to their strategic (long-term) target weighting. Our large capitalization (SPX-type) rating remains favorable,” he said.

However, economist Jeremy Siegel warned investors against “aggressive buying”.

“I expect continued volatility, with sentiment swinging on headlines. While there's potential for a rebound, the market valuations are elevated versus history, so there isn't a strong incentive for aggressive buying just yet,” he said.

According to Alex Tsepaev, the chief strategy officer at B2PRIME Group, the markets have experienced similar or larger corrections nearly every year, indicating this decline could simply reflect normal market fluctuations rather than signaling deeper trouble.

"Investors should watch key economic indicators closely, but a pullback alone isn't necessarily a sign of an impending downturn—it's more likely part of a regular market adjustment," he said.

Despite annual market swings averaging a 16% average drop, the S&P 500 has historically delivered a 10% average annual return since 1928, said Charlie Bilello, the chief market strategist at Creative Planning.

See Also: How to Trade Futures

Upcoming Economic Data

Here’s what investors will keep on Thursday:

• The initial jobless claims data for the week ended March 8 will be released at 8:30 a.m., ET.

• The core and headline producer price index data for February will also be announced at 8:30 a.m., ET.

Stocks In Focus:

• Dollar General Corp. (NYSE:DG) was up 0.60% in premarket on Thursday as it is expected to report before the opening bell. Analysts expect earnings of $1.50 per share on the revenue of $10.26 billion.

• G-III Apparel Group Ltd. (NASDAQ:GIII) was 0.04% higher as Wall Street expects it to report earnings of 97 cents per share on the revenue of $807.59 million before the opening bell.

• Ulta Beauty Inc. (NASDAQ:ULTA) advanced 0.02% as it is expected to report after the closing bell. Analysts expect earnings of $7.12 per share on revenue of $3.46 billion.

• Adobe Inc. (NASDAQ:ADBE) dropped 4.7% as its lower end of the second-quarter outlook was below the market expectations. It expects second-quarter revenue between $5.77 billion to $5.82 billion versus estimates of $5.8 billion. Whereas it expects adjusted earnings of $4.95 to $5 per share versus estimates of $5 per share.

• Intel Corp. (NASDAQ:INTC) jumped 9.91% after announcing a new chief executive officer. The company said its board of directors has appointed Lip-Bu Tan, a former member of Intel’s board of directors, as chief executive officer, effective March 18.

• Aditxt Inc. (NASDAQ:ADTX) slumped 38.03% after it announced an 1-for-250 reverse stock split which will take place on March 17, 2025, to regain Nasdaq compliance, following a delisting notice.

• Anika Therapeutics Inc. (NASDAQ:ANIK) plummeted 24.02% after reporting a quarterly loss of $0.03 per share, significantly missing the estimate of a $0.09 gain.

Commodities, Gold And Global Equity Markets:

Crude oil futures were trading lower in the early New York session by 0.15% to hover around $67.58 per barrel.

The gold spot index was up by 0.34% to $2,943.35 per ounce. Its last record high was at $2,956.37 per ounce. The Dollar Index was up 0.06% at the 103.674 level.

All Asian markets closed lower on Thursday as Japan's Nikkei 225, South Korea's Kospi, Australia's ASX 200, Hong Kong's Hang Seng, India's S&P BSE Sensex, and China's CSI 300 index declined. European markets were mostly lower in trade.

Read Next:

• Time To Buy The Dip Or Wait Till Further Clarity On Tariffs? Here’s What Experts Are Saying Amid Ongoing Market Correction

Photo courtesy: Shutterstock