Stocks rebound from earlier losses as investors shake off weak Microsoft outlook, Fed hike fears

U.S. stock futures rose Thursday as markets looked to bounce back from two days of losses.

Futures tied to the Dow Jones Industrial Average gained about 110 points, or 0.3%. S&P 500 futures and Nasdaq 100 futures added 0.4% each.

Investors eyed employment data showing the slowest job creation pace of the pandemic-era recovery. Private sector employment rose by just 128,000 in May, ADP reported Thursday, falling well short of the 299,000 Dow Jones estimate.

Rates fell as traders took the ADP report to mean the economy is already slowing, suggesting the Federal Reserve could be less aggressive in tightening monetary policy. The benchmark 10-year Treasury yield pulled back more than 0.02 percentage points.

Some technology stocks gained as rates fell. Nvidia and Amazon both rose about 1% in the premarket.

Oil prices also eased slightly ahead of a key decision from the Organization of the Petroleum Exporting Countries about output.

Travel shares that would benefit the most from falling fuel prices rose in premarket trading. Shares of American Airlines and Carnival Corp each gained about 1%.

Investors also parsed through corporate earnings results. Shares of pet retailer Chewy surged roughly 18% premarket after the company reported strong quarterly results. Meanwhile, Hewlett Packard Enterprise fell nearly 5% following slight misses on both earnings and revenue.

The moves came after major indexes posted back-to-back losses on Wednesday. The Dow shed 176.89 points, or 0.5%, on Wednesday. The S&P 500 fell nearly 0.8%, and the Nasdaq Composite retreated 0.7%. The S&P 500 is off 1.4% this week, on pace for its 8th down week in the last 9.

Sentiment took a dip as JPMorgan CEO Jamie Dimon warned that an economic “hurricane” caused by the Federal Reserve and the war in Ukraine is brewing. He said his company is “going to be very conservative with our balance sheet.”

“The market remained choppy with a negative bias to start the month of June,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “Inflation remains a headline concern as underscored by higher oil prices and consumer concerns in the Fed’s Beige Book economic report.”

Indeed, the central bank’s report showed the U.S. has been seeing just “slight or modest” economic growth over the past two months or so.

“Our view is cautious as we close out the second quarter,” Haworth added. “Global central bank uncertainty and the pace of tighter monetary policy, still-tight global energy and agriculture markets — which may lead to higher prices still — and headwinds for corporate earnings growth are risks for investors moving forward.”

Retail earnings continue this week, with Designer Brands, Lululemon Athletica and RH set to report on Thursday. Big tech names like CrowdStrike and Okta are also on deck.