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  • Writer's pictureThe San Juan Daily Star

S&P 500, Dow slip after retail sales data; megacaps lift Nasdaq

U.S. stock index futures slipped on Wednesday, as investors awaited retail sales data amid worries that elevated inflation and a tight labor market will keep the Federal Reserve on track for more interest rate increases this year.

The benchmark S&P 500 .SPX came under pressure on Tuesday after data showed U.S. consumer prices accelerated in January, boosting expectations that the Fed will raise the policy rate at least twice more this year to the 5%-5.25% range.

The consumer price index rose 6.4% last month from a year earlier, far above the Fed’s 2% target but a step down from last year’s blistering pace.

The focus, now, will shift to retail sales data, due at 8:30 a.m. ET, for clues on consumer spending amid worries of slowing economic growth and high inflation.

U.S. retail sales are expected to have risen 1.8% in January, as per a Reuters poll, after falling more than anticipated in December.

At 7:18 a.m. ET, Dow e-minis 1YMcv1 were down 36 points, or 0.11%, S&P 500 e-minis EScv1 were down 6.75 points, or 0.16%, and Nasdaq 100 e-minis NQcv1 were down 19.75 points, or 0.16%.

U.S.-listed shares of Taiwan Semiconductor Manufacturing Co (TSMC) TSM.N fell 5.7% in premarket trading after Warren Buffett’s Berkshire Hathaway Inc BRKa.Nslashed its stake in the chipmaker.

Shares of Airbnb Inc ABNB.O and Tripadvisor Inc TRIP.O jumped more than 9% each after the companies posted forecast-beating results due to strong demand for travel.

Kraft Heinz KHC.O rose 1.3% after the ketchup maker beat quarterly sales estimates, helped by demand for its packaged meals and condiments, despite high prices.

Biogen Inc BIIB.O added 1.4% after it beat analysts’ estimates for quarterly results on strong demand for its spinal muscular atrophy drug, Spinraza.

Nearly 70% of the S&P 500 firms that have reported results so far, have topped profit expectations, as per Refinitiv as of Friday.

However, analysts estimate fourth-quarter earnings fell 2.8% from a year earlier.

Markets have had an upbeat start to the year, driven by a renewed interest in growth stocks that were battered in 2022 as the Fed raised rates aggressively to bring steep prices under control.

The rally, however, stalled last week on signs of a tight labor market and hawkish commentary from Fed policymakers.

Money market traders have priced in at least two more 25 basis point rate hikes this year and see interest rates peaking at 5.2% by July.

The yield on the U.S. 10-year Treasury notes steadied near six-week highs after dipping earlier. [US/]

At 10:11 a.m. ET, the Dow Jones Industrial Average was up 81.07 points, or 0.24%, at 34,327.00, the S&P 500 was up 21.36 points, or 0.52%, at 4,158.65, and the Nasdaq Composite was up 104.62 points, or 0.88%, at 11,996.41.

Coca-Cola Co slipped 0.4% despite a strong full-year profit forecast.

Marriott International Inc edged up 0.8% after the hotel operator forecast first-quarter earnings above Wall Street estimates as it benefited from strong travel demand.

Palantir Technologies soared 9.9% after the data analytics firm forecast its first profitable year and said it had slowed hiring, cut stock-based payouts and reduced cloud computing investments in response to lower spending from recession-wary businesses.

Nearly 69% of more than half of the S&P 500 firms that have reported results have beaten profit expectations, as per Refinitiv on Friday. However, analysts expect fourth-quarter earnings to fall 2.8% from a year earlier.

Advancing issues outnumbered decliners by a 1.56-to-1 ratio on the NYSE and 1.54-to-1 ratio on the Nasdaq.

The S&P index recorded 6 new 52-week highs and no new low, while the Nasdaq recorded 40 new highs and 39 new lows.

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