Dow Set to Retreat Ahead of Inflation, Retail Sales Reports
Stocks looked set to open in the red on Thursday as the relief rally sparked by this week’s U.S.-China tariff deal lost steam.
Futures tracking the Dow Jones Industrial Average fell 207 points, or 0.5%, and S&P 500 futures slipped 0.3%. Contracts tied to the Nasdaq 100 were down 0.2%, putting the tech-heavy gauge’s six-day winning streak at risk.
The three indexes surged at the start of this week after Washington and Beijing brokered a deal to scale back tariffs for 90 days, but the market will need further catalysts to carry on rising. President Donald Trump’s tour of the Middle East did yield some good news Wednesday, with Saudi Arabia’s national oil company Aramco signing agreements with U.S. companies with a potential value of $90 billion.
“Outside of tech the equity mood was actually pretty weak,” Deutsche Bank strategist Jim Reid said in a research note, pointing out that the equal-weighted versions of both the S&P 500 and the small-cap Russell 2000 had dropped on Wednesday. “Among the reasons for a stalling of the equity rally was a relative absence of trade headlines,” he added.
Russia and Ukraine are set to kick off peace talks in Istanbul on Thursday, but the Kremlin has said that President Vladimir Putin won’t attend. If the two countries aren’t able to agree a ceasefire deal, that could scuttle investors’ hopes of a so-called peace dividend.
Economic data on retail sales, producer prices, and the housing market are also due on Thursday.
The yield on the benchmark 10-year U.S. Treasury note slipped 2 basis points to 4.520% on Thursday. The U.S. Dollar Index, which tracks the strength of the greenback against a basket of six other currencies, was down 0.2%.
Bitcoin, the world’s largest cryptocurrency by total market capitalization, was down 1.3% to $101,927 in early trading.