Nasdaq 100 and S&P500: Futures Rise as Markets Weigh Inflation Data and Earnings

Wall Street Futures Rise as Markets Assess Inflation Data

U.S. stock futures increased slightly early Tuesday as traders evaluated new inflation figures and corporate earnings. This follows Monday’s mixed market activity, where indexes struggled to maintain last week’s rally momentum.

At 14:13 GMT, Dow Futures are trading 39598.00, up 118.00 or +0.30%. S&P 500 Index futures are at 5402.25, up 32.50 or +0.61% and Nasdaq Futures are trading 18810.50, up 171.00 or +0.92%.

PPI Data Beats Expectations

July’s Producer Price Index (PPI) grew by 0.1%, below the projected 0.2% rise. This key wholesale inflation metric often indicates future consumer price trends, generating cautious optimism before the upcoming Consumer Price Index (CPI) report. The CPI is expected to show a 0.2% rise after a 0.1% decline in the previous month.

Retail Sales Data Takes Center Stage

Some analysts, including Cameron Dawson of NewEdge Wealth, suggest that retail sales data could impact market sentiment more significantly this week. A decline in retail sales might point to potential weakness in the labor market, affecting investor confidence. Dawson argues that slower economic growth, rather than rising inflation, is the primary concern.

Corporate Earnings Show Mixed Results

Home Depot shares decreased over 2% in premarket trading after lowering its full-year sales outlook, now expecting a 3% to 4% decline in comparable sales. On Holding’s stock fell 6.5% following missed earnings expectations. In contrast, Starbucks stock increased over 10% after announcing Chipotle’s CEO Brian Niccol as its new chief executive, causing a 9% drop in Chipotle’s shares.

Oil Prices Reach Three-Week High

U.S. crude oil prices stayed high due to potential geopolitical tensions in the Middle East, particularly concerns over the Strait of Hormuz. However, prices decreased slightly as expected conflicts had not intensified. The International Energy Agency’s forecast of a crude oil surplus next year, despite OPEC production cuts, continues to affect the demand outlook.

Market Forecast

In the short term, U.S. stock futures may continue to see modest gains, bolstered by the lower-than-expected PPI data. However, market volatility could rise depending on upcoming CPI and retail sales reports. Energy stocks may see increased activity based on Middle Eastern developments and oil market trends.

Traders should stay alert as these economic indicators emerge, potentially causing significant market movements in the coming days. The interaction between inflation data, retail sales figures, and corporate earnings will likely shape market sentiment and influence trading decisions in the near term. Maintaining a balanced approach and staying informed on these key economic factors will be essential for successful trading in the current market environment.

Technical Analysis

E-mini S&P 500 Index futures are higher as the benchmark index tries to build momentum on the strong side of the pivot at 5360.50, which is new support.

The daily chart indicates the index has a clean shot at the 50-day moving average at 5504.11.

A failure to hold 5360.50 could trigger a steep break into the next support level a 5239.75. The major support is the uptrending 200-day moving average at 5164.91.