Investing.com - U.S. stock futures hovered around the flatline following a drop in equities and uptick in U.S. government bond yields in the prior session. Traders eye upcoming business activity data as well as a potential pre-dawn vote in the U.S. House of Representatives on President Donald Trump’s sweeping tax and spending bill. Meanwhile, OpenAI’s CEO reportedly aims to ship an artificial intelligence product in 2026.
1. Futures subdued
U.S. stock futures were muted on Thursday, pointing to a breather for markets after a sell-off in the prior session.
By 03:31 ET (07:31 GMT), the Dow futures contract was mostly unchanged, S&P 500 futures had risen by 6 points, or 0.1%, and Nasdaq 100 futures had advancedby 26 points, or 0.1%.
The main averages slumped on Wednesday, weighed down by a spike in U.S. Treasury yields partly sparked by concerns that Trump’s tax bill would add trillions of dollars to America’s already-massive debt pile. Weak demand for a $16 billion auction of 20-year Treasury bonds also put upward pressure on yields, which tend to move inversely to prices.
Traders were also assessing mixed earnings from retail companies, which have been seen as potentially exposed to punishing U.S. tariffs. Home improvement firm Lowe’s (NYSE:LOW) backed its full-year guidance, although numbers from big-box group Target — whose offerings include more on discretionary items — disappointed.
2. Flash PMIs ahead
Investors are now turning their focus to an upcoming preliminary reading of business activity that could provide fresh insight into the impact of Trump’s tariffs.
S&P Global’s composite purchasing managers’ index cooled to 50.6 last month, down from 53.5 in March and only slightly above the 50-point level denoting expansion.
The index’s tracker of the manufacturing sector is seen slowing to 49.9 in May, while the services gauge is expected to edge up slightly to 51.0.
Several companies have flagged that uncertainty around the effect of the sweeping U.S. levies have made planning out future investments more difficult. Analysts have noted that while the duties have yet to heavily sway U.S. inflation, prices could start to move higher as businesses use up inventories built prior to the implementation of the tariffs.
Murkiness also surrounds whether Trump will extend a delay to his elevated “reciprocal” levies on a host of countries after the pause expires in July. A separate postponement of tariffs on China are also due to end in August.
3. House moves ahead with tax and spending bill
The U.S. House of Representatives is tipped to hold a pre-dawn vote on Trump’s "big, beautiful" budget bill, with Republicans in power in the chamber hoping to overcome days of internal disagreements over the measure.
Along with the extension of 2017 tax cuts, the legislation would slash taxes charged on tips and car loans, while boosting spending on defense and border security. Reductions to key food and health programs for low-income Americans are also included in the bill.
Nonpartisan analysts have said the changes would add between $3 trillion to $5 trillion to the U.S.’s $36.2 trillion debt load.
Still, it remained uncertain if House Speaker Mike Johnson had secured enough Republcian support to pass the bill. Some GOP lawmakers have demanded even greater spending cuts to offset Trump’s desired tax breaks, although Johnson said he was confident he could garner their backing to overcome united Democratic opposition.
Should it pass the House, the bill would go to the Senate, which is also controlled by Republicans.
4. OpenAI aims to begin shipping AI devices by late-2026 -- WSJ
OpenAI CEO Sam Altman told employees that he plans to lead the company in shipping a planned AI device by at least end-2026, the Wall Street Journal has reported.
Altman told employees at the AI startup that he was targeting sales of 100 million devices, and that OpenAI was seeking to create a new class of devices as integral as a smartphone, the WSJ report said, citing a recording of a meeting between Altman and OpenAI employees.
Altman’s comments come just after OpenAI bought a company led by former Apple (NASDAQ:AAPL) designer Jony Ive for $6.5 billion earlier this week. Altman said that the deal had the potential to add $1 trillion in value to OpenAI, the WSJ reported.
Altman and Ive were reportedly aiming to create a third core device for everyday use, after a smartphone and a personal computer. The AI device will reportedly feature no screens, will not be a phone, and is not a wearable.
5. Oil retreats
Oil prices fell Thursday as traders digested a surprise build in U.S. crude stockpiles, as well as uncertainty ahead of renewed U.S.-Iran nuclear negotiations and talk of an Israeli strike on Iran’s nuclear sites.
At 03:32 ET, Brent futures dropped 1.6% to $63.89 a barrel, and U.S. West Texas Intermediate crude futures fell 1.5% to $60.60 a barrel.
The Energy Information Administration reported late Wednesday a 1.3 million-barrel rise in U.S. crude oil inventories, defying expectations of a 1.3 million-barrel drawdown and raising concerns about demand from the world’s largest oil consumer.
Both benchmarks retreated on Wednesday after reports that nuclear talks between Iran and the United States will take place on Friday in Rome.
Prices had jumped earlier on Wednesday following a CNN report that U.S. intelligence suggests Israel is preparing to strike Iranian nuclear facilities, but later surrendered those gains.