Check back for updates throughout the trading day
U.S. equity futures extended gains Tuesday, setting up a fresh series of all-time highs for the three major indices, as investors look to a key retail sales reading that could further cement the case for an autumn rate cut from the Federal Reserve.
Stocks ended higher again Monday, with the Dow Jones Industrial Average closing at a new all-time high, as markets continued to see a rotation from megacap tech stocks into smaller, more cyclical names as Fed rate cut bets continued to solidify.
The Russell 2000, in fact, extended its recent run of gains to close at the highest levels since January of 2022, helped in part by bets that a second administration for President Donald Trump would support domestic stocks and dovish comments from Fed Chair Jerome Powell during an event at the Economic Club of Washington D.C.
Related: Trump shooting has major impact on stocks, Treasury bonds
Powell said that while inflation had remained stubbornly elevated over the first thee months of the year, “three readings in the second quarter, including the one from last week, do add somewhat to confidence”, that it’s returning to the Fed’s preferred 2% target.
Federal Reserve Chair Jerome Powell said Monday that the job market is “no longer overheated” and that he and his colleagues are finally seeing progress on inflation.
Getty
The CME Group’s FedWatch is pricing in only a small chance of a rate cut when the Fed meets later this month, but sees the odds of a September cut at around 86%, with bets starting to form on a 50 basis point reduction as well.
Bond markets were also reflecting the lower rate assumptions, with benchmark 10-year Treasury note yields easing to 4.175% heading into the start of the New York trading session and 2-year paper trading at 4.415%.
Related: Apple at record high as analysts revamp stock price targets
On Wall Street, stocks are looking at a modestly firmer open ahead of retail sales data for the month of June at 8:30 am Eastern time, where economists expect to see a pullback in overall spending amid a weakening job market.
Futures contracts tied to the S&P 500 suggest a 9 point opening bell gain, while those linked to the Dow Jones Industrial Average are priced for a 5 point advance.
The tech-focused Nasdaq, meanwhile, is called 37 points higher with a premarket decline for Nvidia (NVDA) offsetting gains for Tesla (TSLA) and Apple (AAPL) .
US Small Caps are up 6.8% over the last 3 trading days while US Large Caps are flat. The 6.8% spread is 6 standard deviations above the mean & the 3rd largest small outperformance since inception of the first small cap ETF in May 2000. $IWM $SPYhttps://t.co/l5IYmkf6Ih pic.twitter.com/7gYUtiaMEa
— Charlie Bilello (@charliebilello) July 15, 2024
UnitedHealth Group (UNH) shares were a notable early mover, falling 2% in premarket after the health insurance giant posted stronger-than-expected second quarter earnings but held to its full-year profit outlook.
More Wall Street Analysts:
Analyst revisits Nvidia stock price target after Blackwell checksAnalysts prescribe new Walgreens stock price targets after earningsAnalyst revises Facebook parent stock price target in AI arms race
In overseas markets, a muted reading for a key investor sentiment survey in Germany kept stocks in check, with the regional Stoxx 600 benchmark falling 0.37% in Frankfurt and Britain’s FTSE 100 slipping 0.22% in London.
Overnight in Asia, former President Donald Trump’s selection of China hawk JD Vance as his running mate added more pressure to Asia shares, with the region-wide MSCI ex-Japan benchmark falling 0.39% into the close of trading.
Japan’s Nikkei 225, meanwhile, nudged 0.2% higher on its return from Monday’s Marine Day holiday, helped in part by a weaker yen that was likely the beneficiary of billions in currency market intervention by the Ministry of Finance late last week.
Related: Veteran fund manager sees world of pain coming for stocks
