Futures rise after Walmart, Cisco results; traders assess Fed minutes

[August 17, 2023]  By Amruta Khandekar and Shristi Achar A

(Reuters) - Wall Street futures rose on Thursday as Walmart and Cisco reported upbeat results, while investors assessed minutes of the U.S. Federal Reserve's last policy meeting which showed most officials held a hawkish view on interest rates.

Futures for the industrials-heavy Dow Jones rose to session highs as Walmart raised its full-year forecasts and beat estimates for second-quarter sales, lifting the company's shares up as much as 3% before the bell.

Walmart results follow stronger-than-expected earnings from Target and Home Depot earlier this week, marking an upbeat second quarter for major U.S. retailers.

Cisco Systems gained 2.4% in premarket trading after the networking equipment maker's fourth-quarter results beat estimates, and its CEO talked up artificial intelligence opportunities.

Wall Street's main indexes had closed lower on Wednesday after the Fed minutes fueled worries the central bank could tighten monetary policy further, especially after recent data on retail sales and industrial production highlighted resilience in the U.S. economy.

Minutes of the Fed July 25-26 meeting showed most policymakers continued to prioritize the battle against inflation, while few participants cited risks to the economy if rates were pushed too high.

"The fight (against) inflation in the United States is still ongoing, with the minutes from the Federal Reserve meeting indicating that another rate hike is still on the table, which has the potential to push the US into a deeper downturn," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

On the economic data front, a report from the Labor Department due at 8:30 am ET (1230 GMT) is expected to show initial weekly jobless claims fell to 240,000 last week from 248,000 the week before.

A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri/File Photo/File Photo

The numbers, which could potentially signal a tight labor market, will be parsed for additional clues on the U.S. interest rate trajectory.

Traders' bets of a rate hike pause from the Fed in September slipped to 86.5% from about 89% a week earlier, according to CME Group's Fedwatch tool.

The yield on 10-year Treasury notes hit a fresh 10-month high on Thursday while that on the two-year Treasury note, which best reflects short term-rate expectations, edged lower to 4.95%.

Nvidia rose 0.7%, outpacing its megacap growth peers. Its shares have rallied this week with analysts raising price targets ahead of the chip designer's quarterly results later this month, with Oppenheimer being the latest to hike its PT on Thursday.

At 7:12 a.m. ET, Dow e-minis were up 88 points, or 0.25%, S&P 500 e-minis were up 10 points, or 0.23%, and Nasdaq 100 e-minis were up 28.25 points, or 0.19%.

Shares of Ball Corp climbed 4.1% after Britain's BAE Systems agreed to buy the beer can supplier's aerospace assets for about $5.55 billion.

Tapestry lost 1.9% after the Coach handbags maker forecast 2024 profit below Wall Street estimates after it missed quarterly revenue expectations.

(Reporting by Amruta Khandekar and Shristi Achar A in Bengaluru; Editing by Vinay Dwivedi)

[© 2023 Thomson Reuters. All rights reserved.]
This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.