US pre-open: Stocks seen muted as semblance of calm returns to Wall St

US futures pointed to muted open on Wall Street on Thursday as a semblance of calm returns to markets following heavy losses this week.

At 1225 GMT, Dow Jones Industrial Average and S&P 500 futures were down 0.1%, while Nasdaq futures were 0.1% firmer.

Oanda analyst Craig Erlam said: "While volatility in the markets has eased over the last couple of days, it has remained at very high levels, which is probably a sign of the ongoing nervousness among investors which may leave markets vulnerable to further declines. Still, the European session has so far been relatively uneventful compared to the last few days which may be a positive sign ahead of the open in the US.

"The sell-off on Monday was widely attributed to rising yields on the back of higher interest rate expectations in the US and Europe, although it was likely exacerbated by a combination of other factors, such as automated trading and fear of a broader correction given how long it had been since the last. It’s interesting then that while yields fell after the stock market sell-off, they have been creeping higher again and now find themselves not far from the levels they were at on Monday. Should we avoid another plunge in stocks, it would suggest that yields may have been the catalyst but ultimately, the selling that followed was driven by other factors, perhaps including a belief that a correction was overdue."

Market participants were also expected to keep an eye on politics after Senate leaders announced a two-year budget deal late on Wednesday that still needs to pass the House. The deal, outlined by majority leader Mitch McConnell and minority leader Chuck Schumer, would increase military and non-defence spending by $300bn and add more than $80bn in disaster relief.

Across the pond in the UK, the Bank of England left interest rates unchanged at 0.5% and its asset purchase programme at £435bn, as widely expected. But the BoE was also more hawkish than expected, upping its forecasts for economic growth and saying that interest rates may need to rise earlier and faster than previously forecast.

In US corporate news, electric car maker Tesla was weaker in pre-market trade after it posted its biggest quarterly loss ever late on Wednesday, of $675.4m. This compares with a loss of $121m in the same period a year ago

21st Century Fox was also likely to be in focus after its quarterly earnings and revenue beat analysts' expectations. Revenue for the second quarter came in at $8.04bn versus expectations of $7.94bn, while adjusted earnings per share were 42 cents versus a forecast of 38 cents.

Investors were also sifting through earnings from Twitter, CVS Health, Cardinal Health, Philip Morris, Viacom, Teva and Yum Brands.

On the data front, initial jobless claims are at 1330 GMT. Later in the day, speeches are due from Philadelphia Fed President Patrick Harker, Minneapolis Fed President Neel Kashkari and Kansas City Fed President Esther George.