US stock futures tick higher; rate cut optimism ahead of retail sales

U.S. stock index futures rose slightly Thursday, extending the recent positive momentum ahead of the release of widely-watched retail sales data.

At 06:15 ET (10:15 GMT), Dow Jones Futures rose 82 points, or 0.2%, S&P 500 Futures rose 3 points, or 0.1%, and Nasdaq 100 Futures rose 30 points, or 0.2%.

Wall Street indexes rose to two-week highs on Wednesday after the release of softer-than-expected inflation readings on both Tuesday and Wednesday, fueling bets that the Federal Reserve will begin cutting interest rates from September. 

The blue chip Dow Jones Industrial Average rose 0.6%, the S&P 500 climbed 0.4%, while the NASDAQ Composite edged slightly higher. Retail sales to cement Fed rate cut 

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, with the spotlight now on the latest retail sales data.  

The July release will garner a lot of attention Thursday as consumption accounts for about two-thirds of U.S. economic growth.

It is expected to show monthly growth of 0.4%, a slight improvement from the prior month’s flat reading. 

Weekly jobless claims and the Philadelphia Fed manufacturing index and industrial production data are also due later in the session. 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 06:15 ET, the U.S. crude futures (WTI) climbed 0.6% to $77.45 a barrel, while the Brent contract rose 0.6% to $80.27 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