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Weekly Jobless Claims.

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Stock futures were lower Thursday, with the U.S. dollar extending its rally while gold prices retreated after Federal Reserve officials signaled their intention to raise interest rates sooner than previously forecast.

Futures linked to the S&P 500 index edged down 0.4%, suggesting that the broad U.S. market gauge will drop at the open a day after closing 0.5% lower. Nasdaq-100 futures declined 0.6%, pointing to a sharper retreat in technology stocks. Dow Jones Industrial Average futures ticked 0.4% lower.

Investors' risk appetite ebbed after Fed officials Wednesday gave the clearest signals yet of their plans to gradually pull back the easy monetary policies that helped propel markets to record highs. Their median projection showed they see lifting their benchmark rate to 0.6% by the end of 2023, sooner than they anticipated in March.

"The key message is that we will not stay here forever," said Florent Pochon, head of cross-asset strategies at Natixis. "The Fed really wanted to take the opportunity of the current window and the strong momentum to send the signal that it is ready to normalize, but it will be a difficult exercise if they want to avoid another taper tantrum."

While policy makers discussed the prospect of tapering the Fed's bond-buying program, the timing of such a move remains unclear, Chairman Jerome Powell said.

"It was certainly a hawkish surprise, but given what we have seen with the growth picture and higher inflation, it would have been a surprise if there hadn't been a shift," said Seema Shah, chief strategist at Principal Global Advisors. "There have been some concerns building that the Fed was going to fall behind the curve, and I think this suggests that they won't."

A strong U.S. economy means that inflation will be quicker, as there is a clear demand for labor, said Kerry Craig, global market strategist at J.P. Morgan Asset Management. "The markets are coming round to reality on that," he said.

Mr. Craig expects the American central bank to start talking about plans to taper its current bond-buying program in September, and start scaling back early next year, followed by one increase in interest rates by the end of 2023.

Fresh data on weekly jobless claims, due at 8:30 a.m. ET, will offer insights into the state of the U.S. labor market.

Forex:

The WSJ Dollar Index, which tracks the U.S. currency against a basket of others, advanced 0.2%. On Wednesday, it jumped 0.8%, its biggest climb in more than a year.

The Fed's decision to bring forward expectations for interest rate rises is likely to reduce the dollar's appeal as a funding currency, ING said.

The Fed's new projections signalled two rate increases for 2023. Investors may now reconsider using the dollar as a funding currency and instead favor the euro or the Japanese yen, ING analysts said.

"With the Fed moving towards policy normalization a little faster than initially expected, yet the European Central Bank remaining cautious (as per the ECB June meeting last week), EUR/USD may struggle to hit our 1.25 target this summer." EUR/USD could fall towards 1.1920 in the short-term, the analysts said.

EUR/USD fell 0.5% to a two-month low of 1.1937, according to FactSet.

Bonds:

The yield on the benchmark 10-year Treasury note edged lower to 1.558%, from 1.569% Wednesday, when it posted its biggest one-day advance in three months.

Monetary policy will remain "exceptionally" accommodative in most developed markets, Scope Ratings said.

The firm expects policy rates in the U.S., eurozone and Japan to remain on hold at least through 2022. The U.K. will likely increase its base rate to 0.25% by end-2022 and the People's Bank of China is expected to raise its loan prime rate by 10 basis points in 2021 and in 2022, Scope said.

A central risk to Scope's economic baseline could be a tightening of global financial conditions, in the form of higher long-term treasury yields, a significant correction in bubbly global equity markets or depreciation of exchange rates, the firm said.

Commodities:

Gold prices slump after Fed officials forecast interest rates rising sooner than previously expected. Comex gold futures dropped 2.8% to $1,808.70 a troy ounce.

The precious metal was under pressure from a stronger dollar and a jump in bond yields that came after the Fed's meeting Wednesday, said James Steel, chief precious metals analyst at HSBC.

"Further steep losses from here may not be justified" as the Fed's policies still remain very accommodative and as yield and dollar gains prove short-lived, he adds.

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