By Shubham Batra and Shashwat Chauhan
(Reuters) – Wall Street was set for a higher open on Thursday as retail sales data for July indicated resilient consumer spending, allaying fears of an imminent recession in the world’s biggest economy.
All megacap and growth stocks edged up in premarket trading, with Amazon.com (NASDAQ:) leading the pack, rising 2.3%.
Retail sales increased 1.0% last month after a downwardly revised 0.2% drop in June, allaying fears of a sharp economic slowdown that were fanned by a jump in the unemployment rate last week.
Retail bellwether Walmart (NYSE:) added 8.0% after raising its annual profit forecast for the second time this year.
“The economy is not going into a recession imminently. This will take 50 basis points in September off the table. Still think that 25 basis points make sense just because inflation continues to ease and we got a couple of good reports, PPI and CPI adding to that,” said Steve Wyett, chief investment strategist at BOK Financial.
Separately, a Labor Department report showed the number of Americans filing new applications for unemployment benefits came in at 227,000 for the week ended Aug. 10, compared with an estimate of 235,000.
The yield of the two-year and rose after the data, with traders increasing the bets for a 25 basis points rate cut by the Federal Reserve to 75% versus 65% before the data.
Investors have kept a cautious eye on this week’s data releases – the last set of economic indicators before Fed Chairman Jerome Powell delivers a much-anticipated speech at Jackson Hole next week.
Comments from Philadelphia Fed President Patrick Harker, due at 1:10 p.m. ET, will be closely monitored for any clues on the Fed’s interest-rate path.
Meanwhile, Atlanta Fed President Raphael Bostic told the Financial Times that he is open to an interest rate cut in September, adding that the U.S. central bank can’t “afford to be late” to ease monetary policy.
The on Wednesday extended its winning streak to five sessions, boosted by softer inflation data, but the Nasdaq barely scraped into positive territory as Alphabet (NASDAQ:) and some megacap stocks weighed.
At 8:47 a.m. ET, Dow E-minis were up 367 points, or 0.91%, E-minis were up 200.75 points, or 1.05%, and S&P 500 E-minis were up 49 points, or 0.89%.
Among other movers, Cisco Systems (NASDAQ:) rose 7.9% after it forecast better-than-expected first-quarter revenue on Wednesday and said it was cutting 7% of its global workforce.
Nike (NYSE:) climbed 5.1% as billionaire investor William Ackman built new stakes in the sportswear company and investment management company Brookfield during the second quarter.
Ulta Beauty (NASDAQ:) jumped 11% after Warren Buffett’s Berkshire Hathaway (NYSE:) acquired a stake in the cosmetics store chain.
Deere (NYSE:) & Co gained 1.5% after the farm, construction and forestry equipment maker beat analysts’ expectations for third-quarter profit.
U.S.-listed shares of Alibaba (NYSE:) Group Holding slipped 2.4% after the e-commerce giant missed market expectations for first-quarter revenue.
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