Wall St Set To Open Lower After Mixed Economic Data, Hawkish Fed Comments

U.S. stock indexes were set to open lower on Thursday as mixed economic data and hawkish comments from a Federal Reserve official spurred concerns that the central bank will not tone down its aggressive stance on interest rate hikes.

Softer-than-expected inflation data in recent days had boosted expectations of smaller interest rate increases, but strong retail sales figures on Wednesday stoked fears that the Fed could keep tightening the monetary policy further.

St. Louis Federal Reserve President James Bullard on Thursday said rate hikes so far "have had only limited effects on observed inflation," and that the central bank needs to continue raising interest rates probably by at least another full percentage point.

Several other Fed officials in recent days have also stressed on the need to continue raising interest rates, though at a slower pace.

Further weighing on markets, data showed the number of Americans filing new claims for unemployment benefits fell last week despite a surge in layoffs in the technology sector, indicating a still tight labor market.

Wall Street closed the previous session lower as a grim outlook from Target Corp sparked concerns about retailers heading into the crucial holiday season.

"There's still some thought about the Target news of yesterday ... investors are trying to understand how weak the fourth quarter might look and its impact on companies," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

The S&P 500 is up 8% from its October closing lows on hopes of a less hawkish Fed, though the index is down 17% so far this year on fears of a recession stemming from the hefty interest rate hikes.

Meanwhile, UK Finance Minister Jeremy Hunt on Thursday raised taxes on higher earners and energy companies as part of his new plan to shore up Britain's finances, even as he forecast the economy will shrink next year.

At 8:56 a.m. ET, Dow e-minis were down 384 points, or 1.14%, S&P 500 e-minis were down 52.5 points, or 1.32%, and Nasdaq 100 e-minis were down 177.5 points, or 1.51%.

Department store chain Macy's Inc gained 8.0% and personal care products retailer Bath & Body Works Inc surged 19.2% in premarket trading after the companies raised their annual profit forecasts.

Kohl's Corp slipped 2.6% after the company withdrew its 2022 sales and profit forecasts, blaming an uncertain economic outlook and the departure of top boss Michelle Gass.

U.S.-listed shares of Alibaba Group Holding Ltd fell 2.1% after the Chinese e-commerce giant posted a smaller-than-expected rise in quarterly revenue.

Roku Inc's shares fell 2.9% on the streaming platform's plans to cut 200 jobs.