U.S. index futures rose slightly in Thursday’s pre-market trading, driven by signs of easing inflation and a rebound in stocks after a week of heavy global sell-offs. Positive inflation data and strong performances from companies like Cisco (NASDAQ:CSCO) and Ulta Beauty (NASDAQ:ULTA) boosted investor confidence, while the Federal Reserve may consider lowering interest rates at its next meeting. Attention now turns to retail sales data and Walmart’s earnings.
At 5:16 AM, Dow Jones futures (DOWI:DJI) were up 83 points, or 0.20%. S&P 500 futures increased by 0.13%, and Nasdaq-100 futures advanced by 0.23%. The 10-year Treasury yield stood at 3.845%.
In commodities, oil prices rose on expectations that U.S. interest rate cuts will boost fuel consumption. However, concerns over slowing global demand capped gains. Prices were supported by geopolitical uncertainties and concerns over Iran’s response to the Middle East conflict.
West Texas Intermediate crude for September rose 0.66% to $77.49 per barrel, while Brent for October increased 0.63% to $80.26 per barrel.
The U.S. economic calendar includes several key indicators on Thursday. At 8:30 AM, initial jobless claims, expected at 235,000, along with the Empire State and Philadelphia Fed manufacturing indices, estimated at -6.0 and 7.9 respectively, will be released. Retail sales and the July import price index will also be announced. Industrial production and capacity utilization will be reported at 9:15 AM, with forecasts of -0.1% and 78.5% respectively. St. Louis Fed President Alberto Musalem will speak at 9:10 AM, followed by Philadelphia Fed President Patrick Harker at 1:10 PM.
Asia-Pacific markets had mixed performances. Japan’s Nikkei 225 rose 0.78% to close at 36,726.64 points, while the Topix gained 0.73% to reach 2,600.75 points, marking their fourth consecutive day of gains. Australia’s S&P/ASX 200 grew 0.19% to 7,865.5 despite the unemployment rate rising to 4.2% in July. China’s CSI 300 increased by 0.99%, rebounding from a six-month low. South Korea and India’s markets remained closed due to holidays. Hong Kong’s Hang Seng fell slightly near the close.
Japan’s GDP grew 3.1% annually in Q2, surpassing the 2.1% expectation, driven by increased consumption and wages. This robust growth supports the possibility of further interest rate hikes by the Bank of Japan, which aims to combat inflation and reduce monetary stimulus.
China’s industrial production slowed for the third consecutive month in July, growing by 5.1%, below forecasts. In contrast, retail sales rose by 2.7%, better than the 2.0% in June and above expectations of 2.6%. Despite some improvement in consumption, analysts believe more stimulus is needed, especially given the weak overall economic recovery and a decline in the real estate sector.
New home prices in China fell 4.9% in July, marking the biggest drop in nine years. Despite supportive policies, the real estate sector continues to struggle, negatively impacting the economy. Analysts warn that the 5% GDP growth target for 2024 may be difficult to achieve.
European markets are posting gains, maintaining the positive momentum of the week, as investors digest lower-than-expected inflation data from the U.S. and U.K. The healthcare sector is leading the gains.
U.S. stocks closed higher on Wednesday, with the Dow Jones surpassing 40,000 points and the Nasdaq and S&P 500 posting gains for the fifth consecutive session. The Dow Jones rose 242.75 points (+0.61%) to 40,008.39. The S&P 500 advanced 20.78 points (+0.38%) to 5,455.21. The Nasdaq gained 4.99 points (+0.03%) to 17,192.60. CPI data indicated a 0.2% increase in July, following a 0.1% decrease in June, in line with expectations. The annual inflation rate slowed to 2.9%, suggesting a more stable economic environment. The CME Group’s FedWatch Tool shows a 64.5% chance of a 0.25 percentage point rate cut by the Federal Reserve in September and a 35.5% chance of a 0.5-point cut.
Atlanta Federal Reserve President Raphael Bostic indicated openness to a rate cut as early as September, stating that the central bank should act before Q4. He noted that inflation has slowed, facilitating rate cuts, and also considered larger cuts if the labor market weakens.
On the earnings front, Walmart (NYSE:WMT), Alibaba Group (NYSE:BABA), JD.com (NASDAQ:JD), John Deere (NYSE:DE), NICE (NASDAQ:NICE), Grab (NASDAQ:GRAB), Applied Industrial Technologies (NYSE:AIT), Sow Good (NASDAQ:SOWG), Gambling (NASDAQ:GAMB), Golar LNG (NASDAQ:GLNG) will report before the market opens.
After the close, numbers from Applied Materials (NASDAQ:AMAT), Coherent (NYSE:COHR), Amcor (NYSE:AMCR), H&R Block (NYSE:HRB), Sigma Lithium (SGML), Despegar (NYSE:DESP), ReNew Power (NASDAQ:RNW), Alvotech (NASDAQ:ALVO), Globant (NYSE:GLOB), and more are expected.