Wall Street expected to retreat at the opening bell

Following a long weekend break, US stocks have whipsawed lower and then rebounded so far this week, with Thursday set to mark another day splashed with red. The Dow Jones Industrial Average is predicted to open around 160 points, around 6%, lower with similar declines for the S&P 500 and the tech-powered Nasdaq Composite, having risen 1.6%, 2% and 2.7% respectively on Wednesday. It’s been a frantic week, said market analyst Craig Erlam at Oanda, with US tech stocks lurching into correction territory, with reports that Japanese behemoth Softbank is betting heavily on the sector in recent months further accelerating the decline. Despite the previous day’s fight back, “we shouldn't be lulled into a false sense of security” Erlam said. “We've seen an excessive amount of volatility over the last week and the tech sector has only been set back a month. That's not to say we're definitely going to see further sharp falls but it should perhaps be approached with caution.” This caution comes in sync with gains for gold on Thursday, gaining as the dollar continues to pare recent gains but is dragging its feet, which may be encouraging for gold bulls. He said the European Central Bank’s (ECBs) policy decision today may have a hand to play in things, with unfounded stimulus expectations having the potential to lead to euro rally that would put further downward pressure on the dollar and giving gold prices a boost. But over at IG, Chris Beauchamp said the ECB meeting should make at least a passing reference to recent euro strength against the dollar, although he said firm action is unlikely this time. “Instead we will likely see the bank lay out a path to further easing later in the year, responding as needed if and when the initial rebound from the Covid-19 economic shock begins to fade. Markets looking for a real boost may well be disappointed, bolstering the current negative price action of the past week.” Four things to watch for on Thursday: US initial jobless claims data for the week ending September 5 will be eyed to see if the number of Americans filing for unemployment manages to stay below 1 million for two weeks in a row, having dropped to 881,000 in the previous week The US producer prices index (PPI) for August will be eyed to see if they have continued the upward trend following a 0.6% rise in July, which reversed a 0.2% decline in June and was the largest increase in prices at the factory gates since October 2018 Share price reaction from security software firm ZScaler Inc (NASDAQ:ZS) after its fourth quarter results managed to beat analyst estimates At the other end of the scale, investors may be looking to offload shares in video game rental group GameStop Corp (NYSE:GME) after its second quarter numbers fell short of market forecasts