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Stock Futures and Market Sentiment

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U.S. stock futures are showing strength as bond yields stabilize, with traders closely watching retail sales data and the opening activity of the ARM Holdings IPO.

Stock-Index Futures Trading

  • S&P 500 futures (ES00) rose by 10 points, or 0.2%, reaching 4527.
  • Dow Jones Industrial Average futures (YM00) gained 45 points, or 0.1%, standing at 34963.
  • Nasdaq 100 futures (NQ00) added 44 points, or 0.3%, reaching 15596.

Previous Day’s Performance

On Wednesday, the Dow Jones Industrial Average (DJIA) experienced a decline of 70 points, or 0.2%, closing at 34576. In contrast, the S&P 500 (SPX) saw an increase of 6 points, or 0.12%, ending at 4467. Similarly, the Nasdaq Composite (COMP) gained 40 points, or 0.29%, reaching 13814.

Positive Sentiment and Inflation Data

Investor sentiment towards stocks appears mildly positive early Thursday, as a decrease in government bond yields suggests reduced concerns about the Federal Reserve’s potential interest rate hikes following the latest inflation figures.

According to a report released on Wednesday, annual core consumer prices—excluding volatile items such as food and energy—rose by 4.3% in August. This is down from the previous month’s 4.7% and marks the lowest increase in nearly two years.

Market strategist at Deutsche Bank, Henry Allen, commented, “After much anticipation, markets mostly took the U.S. CPI release in their stride yesterday, with bonds and equities remaining relatively stable before witnessing a subsequent bond rally.”

Currently, market expectations indicate a minimal likelihood of the Federal Reserve raising borrowing costs after its upcoming meeting. Furthermore, the possibility of a 25 basis point hike in November remains undecided.

Thursday’s Economic Updates

Investors are eagerly awaiting the release of key U.S. economic data today, including producer prices and retail sales data at 8:30 a.m. Eastern. Additionally, the weekly initial jobless claims will be announced at the same time, followed by the July business inventories report at 10 a.m.

In addition to these updates, all eyes are on the opening trading of ARM Holdings ARM, as the chip designer has priced its IPO at $51 per share. This valuation puts the U.K.-based group at $52 billion, which is at the higher end of expectations. A successful ARM listing could potentially revive the IPO market and boost overall market sentiment.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, commented on the ARM listing, stating that while investors are eager for higher prices, ARM is choosing to play it safe to ensure a surge in share prices once trading begins.

Another event taking place today is the policy decision by the European Central Bank (ECB) at 2:15 p.m. local time and 8:15 a.m. Eastern. While ECB decisions typically have minimal impact on U.S. trading, it is unusual for the market not to have a clear view of what will happen in a major central bank meeting.

The ECB is facing the challenge of sticky inflation and slowing economic activity, particularly in Germany. As a result, there is a two in three chance of a 25 basis point hike by the ECB.

Read: Leaked inflation forecast turns ECB expectations toward a hike

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