U.S. stock market index futures pared their gains as European Central Bank chief Mario Draghi spoke, after the central bank kept its interest and deposit rates unchanged.
In a press conference, Draghi said the ECB is "technically ready" to lower the bank's deposit rate into negative territory for the first time, which would mean the central bank would charge commercial banks for holding their money overnight, but ruled it out for the time being.
"That's an indication that Draghi feels that the problem of lending is going to continue to dampen the outlook for a comeback anytime soon," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The risk in the euro zone remains to the downside."
The ECB left its main interest rate unchanged at a record low 0.50 percent and said the euro zone is on track for a "very gradual recovery" later this year driven by the central bank's loose monetary policy and demand from abroad. (CNBC.com is streaming this event live.)
"The Governing Council continues to see downside risks surrounding the economic outlook for the euro area," Draghi added. "They include the possibility of weaker-than-expected domestic and global demand and slow or insufficient implementation of structural reforms in euro area countries."
European shares also cut their gains following the press conference.
On the economic front, jobless claims dropped 11,000 to a seasonally adjusted 346,000, according to the Labor Department. Economists expected a reading of 345,000. Earlier, executive recruitment firm Challenger, Grey & Christmas' said corporate job cuts declined again in May.
Investors will be paying close attention to Friday's government jobs report. Employers are forecast to have added 170,000 jobs to their payrolls last month, slightly up from April's 165,000 count, according to a Reuters survey. The unemployment rate is seen holding at an almost 4-1/2 year low of 7.5 percent.
(Read More: Will Friday's Jobs Report Save Stocks? Pros Weigh In)
Employment is a key indicator for the Fed, and Chairman Ben Bernanke has indicated the central bank could start tapering off its $85 billion bond purchases if the jobs market shows consistent improvement.
"The weaker ADP employment survey and ISM (Institute of Supply Management) non-manufacturing employment sub-component, released on Wednesday, were both consistent with U.S. employment growth slowing modestly in May," said Emily Nicol, an economist at Daiwa Capital Markets, in a research note on Thursday.
(Read More: Traders Confused: Is Jobs Market Improving or Not?)
In a scratch poll by CNBC of money managers, economists and strategists on Wednesday, around 35 percent forecast the Fed would start winding down its bond purchases in September, while 23 percent expected the Fed to wait until January 2014. Only 3.8 percent expected tapering off to start next month.
Stocks posted sharp losses across the board Wednesday, with the Dow suffering its worst one-day decline in nearly two months to close below the psychologically-important 15,000 level. The S&P 500 and the Nasdaq also fell more than 1 percent each.
Meanwhile, bargain hunters may be prepared to step in as the S&P showed signs of being oversold.
A measure of market movement known as the advance/decline line, which measures stocks rising and falling compared to previous values, showed that over a 10-day time frame, the index is at "extreme oversold levels," according to research from Bespoke Investment Group.
While the near-term implications vary, the S&P 500 averages gains of 2.18 percent and 6.21 percent over the next three and six months respectively when it hits this level.
"If you remain of the view that the bull market remains intact, based on the S&P 500's performance following prior oversold readings, it is right about time to start dusting off the old buy list," Bespoke said.
In company news, PepsiCo denied rumors that it will buy out Israel's SodaStream International, which makes carbonated drinks from tap water. Regardless, SodaStream rallied sharply in pre-market trading.
Among earnings, JM Smucker posted earnings that easily topped expectations, while revenue was in line with estimates.
Despite the rise in stock futures, bond yields fell, with the benchmark 10-year slipping to 2.083 percent.
—By CNBC's JeeYeon Park. Follow JeeYeon on Twitter: @JeeYeonParkCNBC
What's Happening This Week:
THURSDAY: Quarterly services survey, natural gas inventories, Fed balance sheet/money supply, Wal-Mart shareholder mtg, Google shareholder mtg, GM annual mtg; Earnings from Cooper Cos., Vail Resorts
FRIDAY: Employment situation, consumer credit
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