US stock futures climb strongly after retail sales point to soft landing

U.S. stock index futures rose strongly Thursday, after healthy economic data pointed to a soft landing for the U.S. economy while not preventing a Federal Reserve rate cut.

At 08:45 ET (12:45 GMT), Dow Jones Futures rose 320 points, or 0.8%, S&P 500 Futures rose 40 points, or 0.7%, and Nasdaq 100 Futures rose 177 points, or 0.9%. Retail sales suggest consumer resilience 

U.S. retail sales rose by a larger than expected amount in July, pointing to resilience in consumer spending activity ahead of next month’s Federal Reserve meeting.

Retail sales rose by 1% last month, accelerating from an unchanged reading in June, according to Commerce Department data released earlier Thursday, more than the 0.4% expected.

On an annual basis, retail sales  rose by 2.7%, having increased by a revised lower 2.0% in June. 

Additionally, the number of Americans filing new applications for unemployment benefits fell last week, reinforcing concerns that a gradual softening of the labor market remains intact.

Softer CPI and producer price index readings this week suggested inflation was cooling, raising expectations of an interest rate cut in September. 

At the moment traders see a greater chance for a 25 basis point reduction, over earlier bets on a 50 bps cut, CME Fedwatch showed. Walmart earnings in spotlight 

Also on tap are quarterly earnings from supermarket chain Walmart (NYSE:WMT ), which is considered as a bellwether for retail demand. 

The earnings come after rival Home Depot (NYSE:HD ) warned of a weaker annual profit and clocked a bigger-than-expected drop in its annual comparable sales earlier this week. 

Cisco Systems (NASDAQ:CSCO ) stock gained strongly in extended trading late Wednesday after the networking equipment giant reported better-than-expected fourth-quarter earnings and announced a restructuring plan.

Additionally, Ulta Beauty (NASDAQ:ULTA ) stock soared premarket after Warren Buffett’s Berkshire Hathaway (NYSE:BRKb ) reported a new stake in the cosmetics company, while Nike (NYSE:NKE ) stock gained after Bill Ackman’s Pershing Square revealed a position in the sports footwear retailer. Crude rises despite US inventories rise 

Crude prices rose Thursday, supported by optimism that potential U.S. interest rate cuts will boost economic activity, although gains have been limited by a surprise rise in U.S. stockpiles. 

By 08:45 ET, the U.S. crude futures (WTI) climbed 1.1% to $77.79 a barrel, while the Brent contract rose 1% to $80.58 a barrel.

Risk sentiment has been on the rise of late as benign inflation data reinforcing expectations the Federal Reserve will cut interest rates next month, likely boosting demand for crude from the world’s largest consumer.

However, both benchmarks fell more than 1% on Wednesday and the gains this session have been limited by data showing U.S. crude inventories  rose unexpectedly last week.

U.S. crude oil stockpiles rose by 1.4 million barrels in the week ended Aug. 9, raising concerns about weaker demand ahead as the summer driving season draws to an end. 

(Ambar Warrick contributed to this article.)

Source: Investing.com