(Bloomberg) — US stock futures drifted as earnings from the nation’s biggest retailers kicked off on Tuesday, putting the focus on the strength of American consumers as markets hover near record highs.
S&P 500 contracts dropped less than 0.1%. Intel Corp. advanced more than 5% in early trading, with the Trump administration in talks to take a stake of about 10%. Home Depot Inc. fluctuated as consumers avoided big-ticket purchases last quarter. With Target Corp. and Walmart Inc. also set to report this week, traders will parse the results for clues on consumer sentiment and tariff effects.
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Europe’s Stoxx 600 rose 0.5% as signs of progress toward a peace settlement in Ukraine lifted sentiment. A Goldman Sachs Group Inc. basket of European defense stocks dropped as much as 5.7%, with the move amplified by Hamas’s agreement to a truce proposal in Gaza. The euro rose 0.2%.
Treasuries eked out gains after S&P Global Ratings affirmed its AA+ long-term rating for the US, with the 10-year rate falling less than one basis point to 4.33%. The dollar was little changed.
Traders will turn their gaze later this week on the Federal Reserve, with Chair Jerome Powell set to unveil a new policy framework at the Jackson Hole gathering on the central bank’s inflation and employment goals.
Money markets are currently betting the Fed will deliver its first rate cut for the year in September, as labor-market weakness outweighs inflation risks, with another move expected before year-end.
“With much of it priced in already, equities may need a new catalyst,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank. “August through October is seasonally soft, and rising long-term bond yields could tempt investors to pocket recent gains.”
Oil slipped as traders weighed the outlook for an end to the conflict in Ukraine and a potential future supply increase of Russian crude. Brent fell below $66 a barrel, remaining within the narrow band seen for the last two weeks.
“Even if the US were to ease restrictions, Moscow would remain heavily reliant on buyers like India and China to absorb the majority of its crude exports,” cautioned Ole Hvalbye, an analyst at SEB AB. “Any unwind would likely be gradual and uneven.”
What Bloomberg Strategists Say…
“We have moved closer to a Ukraine peace deal in the past 24 hours — but only marginally so. And almost certainly not enough to offer any lasting support to European stocks which are running into technical resistance that capped gains earlier this year.”
—Conor Cooper, Macro Strategist. Click here for the full analysis.
Corporate News:
Anglo American Plc suffered a major setback to its restructuring plans after Peabody Energy Corp. decided to walk away from a $3.8 billion deal to buy its steelmaking coal business following a fire at an Australian mine. A key Home Depot Inc. sales metric disappointed in the latest quarter, a sign that consumers are staying away from big purchases as interest rates remain high and inflation uncertainties linger. SoftBank Group Corp. agreed to buy $2 billion of Intel Corp. stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. BHP Group’s full-year underlying profit fell by more than a quarter to its lowest level since the pandemic, broadly in line with market expectations, as prices of its key earners — iron ore and coking coal — came under pressure from softer Chinese demand. Nvidia Corp. is developing an AI chip specifically for China which will be more powerful than the H20 model, Reuters reports, citing people familiar with the matter. Shein Group Ltd. has considered moving its base back to China in the hopes that it would help sway Beijing authorities to sign off on the fast-fashion retailer’s plans to go public in Hong Kong, according to people familiar with the matter. Apple Inc. is expanding iPhone production in India at five factories, including a pair of recently opened plants, as it seeks to lessen its reliance on China for US-bound models. An increasing number of Mediobanca SpA shareholders are taking up Banca Monte dei Paschi di Siena SpA’s hostile takeover offer, providing a tailwind ahead of the bid’s end on Sept. 8. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.1% as of 7:40 a.m. New York time Nasdaq 100 futures fell 0.2% Futures on the Dow Jones Industrial Average were unchanged The Stoxx Europe 600 rose 0.5% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.2% to $1.1683 The British pound rose 0.1% to $1.3519 The Japanese yen was little changed at 147.77 per dollar Cryptocurrencies
Bitcoin fell 0.8% to $115,546.69 Ether fell 0.7% to $4,302.02 Bonds
The yield on 10-year Treasuries was little changed at 4.33% Germany’s 10-year yield was little changed at 2.76% Britain’s 10-year yield was little changed at 4.74% Commodities
West Texas Intermediate crude fell 1.3% to $62.62 a barrel Spot gold rose 0.2% to $3,340.78 an ounce This story was produced with the assistance of Bloomberg Automation.
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