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Wall Street on edge ahead of Yellen speech

U.S. stock index futures indicated a lower open on Thursday as traders looked to a speech on inflation and policy from U.S. Federal Reserve Chair Janet Yellen, one week after the central bank surprised the markets and helped stir up new fears of deflation.

In morning economic news, durable goods showed a decline of 2 percent. Weekly jobless claims came in at 267,000. New home sales will be released at 10:00 am, ET.

Dow futures were briefly down more than 150 points, while S&P 500 and Nasdaq futures also traded lower.

Treasury yields held lower, with the 2-year yield at 0.68 percent and the 10-year yield at 2.10 percent.

The U.S. dollar traded lower against major world currencies, with the euro at $1.125 and the yen at 119.4 yen against the greenback.

Traders are particularly eyeing Yellen's comments on inflation in the 5 p.m. ET speech at the University of Massachusetts, where the audience will not be able to ask questions.

Last week saw the Fed hold off on a rate hike, but its real surprise was the more dovish-than-expected message that came with it. It pointed to concerns about international developments—China's slowing growth—and pared back its own economic forecasts, including the one for inflation.

Since the Thursday meeting, commodities have tanked, with copper down more than 6 percent and oil down nearly 5 percent. China has also become an even bigger source of concern for markets, now that some worry the Fed might see more dire economic problems that could spread to the U.S. economy.

In Europe, European stocks traded lower, with investors keeping a close eye on shares in Volkswagen after its chief executive, Martin Winterkorn, resigned yesterday.

German auto company BMW traded down around 5 percent after a report in magazine Auto Bild claimed that some of its diesel cars were found to exceed emissions standards, which also weighed on sentiment in Europe.

Federal Reserve Bank Chair Janet Yellen.
Getty Images
Federal Reserve Bank Chair Janet Yellen.

In Asia, the Shanghai Composite index closed up 0.89 percent, while Japan's Nikkei finished 2.76 percent lower.

On the earnings front, Accenture reported quarterly profit of $1.15 per share, beating estimates by three cents, with revenue also above forecasts.

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Nike, Bed Bath & Beyond, Jabil Circuit and Pier 1 Imports are all expected to come after the bell.

In oil markets, Brent crude traded at around $47.88 a barrel, up 0.27 percent, while U.S. crude was at $44.64 a barrel, up 0.36 percent.

--CNBC's Patti Domm and Peter Schacknow contributed to this report.