US pre-open: Futures edge lower amid rates hike concerns

US stock futures edged lower on Thursday amid growing concerns over the timing of the first Federal Reserve rate hike.

The Dow Jones Industrial Average was expected to open approximately down by 23 points, while the S&P 500 and the Nasdaq were both set to begin the session two points lower.

US stocks closed higher on Wednesday, with the Nasdaq Composite closing at a record high, driven higher by a rise in European stocks, which moved north on news that Greece and its creditors might be nearing a deal.

However, on Thursday, Christine Lagarde, the managing director of the International Monetary Fund, warned there was still a lot of work to be done before an agreement could be reached.

Fed worries

“The US market is somewhat sheltered from the fallout in the Eurozone, but while corporate reporting remains thin and the Fed remains tight-lipped, traders are turning to Europe for direction,” said IG’s market analyst David Madden.

“The Federal Reserve is not likely to raise rates next month, but traders are reluctant to buy into the market because even if rates remain on hold in the near-term, the chatter of a September rate hike will circulate.”

Meanwhile, John Williams, president of the San Francisco Fed, told the Monetary Authority of Singapore the central bank was likely raise interest rates later in 2015, reiterating what Fed chairwoman Janet Yellen said on Friday.

Speculations over the timing of the first rate hike continued to boost the dollar, which surged to a 12-year high against the yen on Thursday.

The greenback gained 0.43% against the pound but lost 0.26% against the euro, while gold futures climbed 0.11% to $1,187.30.

The economic calendar sees the release of weekly jobless claims for the week to 23 May at 13:30 BST, followed by pending home sales index for April at 15:00 BST.

In company news, retailer Costco Wholesale edged 1.51% in pre-market trading after reporting earlier on Thursday that its third quarter profit rose, on the back of low gas prices and strong store sales.

Chip maker Broadcom jumped 21.8% ahead of the bell, after the Wall Street Journal reported late on Wednesday that it would receive a takeover bid from sector peer Avago Technologies, which will report after the close today.

Oil giant Chevron inched 0.17% lower in pre-market trading after announcing it had raised approximately $60m by selling a stake in the operator of New Zealand’s sole refinery.

Oil prices edged higher, with West Texas Intermediate gaining 0.31% to $57.69 a barrel, while Brent rose 0.59% to $62.43 a barrel clawing back some of the previous session's losses.