Stock futures dipped slightly on Tuesday as investors awaited earnings reports from major retailers and kept an eye on Federal Reserve Chair Jerome Powell's upcoming speech. Futures for the Dow Jones Industrial Average, S&P 500, and Nasdaq-100 were all down about 0.1%.
Among the major retailers reporting, Home Depot's shares declined over 1% after releasing second-quarter earnings that fell short of expectations. However, the company maintained its outlook for the full year. Other retailers like Lowe's, Walmart, and Target are set to announce their earnings later in the week, providing insight into consumer sentiment amid economic uncertainties.
Traders are closely monitoring Powell's speech at the annual economic symposium in Jackson Hole, Wyoming, where central bank officials will convene. Richard Saperstein, Chief Investment Officer at Treasury Partners, anticipates Powell may signal a 25 basis point rate cut in September to support the economy through year-end and emphasize the Fed's independence from political influences.
Market expectations for a rate cut in September are high, with the fed funds futures market indicating an 83% probability of a quarter-point reduction at the next Fed policy meeting. This sentiment, along with a quiet trading session on Monday where the S&P 500 closed nearly flat, underlines the cautious optimism among investors.
In Europe, shares were generally higher following U.S. President Donald Trump's promise of "security guarantees" to Ukraine. However, European defense stocks fell on the news, with companies like Renk, Leonardo, Hensoldt, and Saab witnessing notable declines.
SoftBank's announcement of a $2 billion investment in Intel boosted the chipmaker's stock in extended trading. This strategic move comes as Intel seeks to capitalize on emerging technologies like artificial intelligence.
Meanwhile, Meta Platforms has seen a significant increase in short interest this year, reflecting heightened market scrutiny and potential concerns over various challenges facing the company. Palo Alto Networks bucked the trend by posting strong quarterly results and providing robust guidance, driving its stock higher after hours trading.
Looking ahead, investors are anticipating updates from the Federal Reserve and key retailers later in the week, with a focus on how these developments may shape market dynamics in the near term. Analysts suggest that economic data and policy signals will continue to influence market sentiment as investors navigate a complex landscape of geopolitical uncertainties and economic indicators.
