Futures rise as focus shifts to retail sales data
2024.07.16 08:02
By Lisa Pauline Mattackal and Ankika Biswas
(Reuters) -Futures tied to the and the Nasdaq climbed on Tuesday as investors perused a set of corporate earnings including Bank of America and awaited monthly retail sales numbers for insight into where U.S. inflation currently stands.
Bank of America’s second-quarter profit fell as its interest income shrank and it set aside more money to cover potential credit losses. However, the second-largest U.S. bank’s shares were up 1% in premarket trading.
Morgan Stanley also rose 0.9% ahead of its results before markets open.
The blue-chip Dow closed at a record high in Monday’s upbeat session on strong bets of a Federal Reserve interest-rate cut in September and a second term for presidential candidate Donald Trump following an assassination attempt.
Futures tracking the jumped 1% after the small-cap index closed at its highest level since January 2022, as investors continue to move away from heavily weighted tech stocks, which have driven most of Wall Street’s rally this year.
Attention now shifts to retail sales data, due at 8:30 a.m. ET, to assess how U.S. consumers have responded to persistent inflation. June retail sales are expected to fall 0.3% on a monthly basis, according to economists polled by Reuters, after a 0.1% rise in the prior month.
“Macro policy still trumps US election uncertainty for now, as recent data confirms the disinflation trend,” strategists at J.P.Morgan said in a note.
Markets took it as a dovish signal when Fed Chairman Jerome Powell said on Monday that the latest economic data “add(s) somewhat to confidence” that inflation was returning to the central bank’s 2% target.
Traders now see interest rates falling by September, with a nearly 88% chance of a 25-basis-point reduction by that meeting, according to the CME’s FedWatch.
Although investors perceived a potential second presidential term for Trump as a positive sign for equities after he survived the shooting at his campaign rally on Saturday, there were signs of uncertainty creeping in, with Wall Street’s “fear gauge” briefly touching its highest level in three weeks.
The former president formally selected Senator J.D. Vance as his running mate on Monday.
However, Trump-linked stocks retreated after Monday’s rally, with Trump Media & Technology Group, software firm Phunware and video-sharing platform Rumble losing between 2.4% and 7.9%.
At 6:56 a.m. ET, were down 2 points, or -0%, were up 7.25 points, or 0.13%, and were up 40.25 points, or 0.2%.
UnitedHealth Group (NYSE:) reported a second-quarter profit beat. However, the stock dropped 1.5%, reversing early gains,after it also reported higher-than-expected medical costs in the quarter.
Tinder owner Match jumped 7.4% after a report activist investor Starboard has a stake of more than 6.5% in the company and was pushing for a possible sale if a turnaround wasn’t successful.
Tesla (NASDAQ:) gained 1.6% after a report CEO Elon Musk planned to commit around $45 million a month to a new pro-Trump super political action committee.
