May 23, 2024

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Stock futures fall as retail outsells, earnings target missed

Stock futures fall as retail outsells, earnings target missed

US stock futures fell Wednesday morning amid the weight of Wall Street Earnings warning from retail pioneers Take aim for government retail sales data which showed strong consumer spending ahead of the main holiday season.

Futures contracts linked to the S&P 500 index (^ The Salafist Group for Preaching and Combat) and the Dow Jones Industrial Average (^ DJI(hovering below the flat line, while contracts on the technology-heavy Nasdaq Composite Index)^ ix) by 0.2%.

The Commerce Department said on Wednesday Retail sales jumped 1.3% in October While Americans shelled out for food, gas and expensive items last month despite inflationary pressures. Economists surveyed by Bloomberg had expected a headline increase of 1.0% after activity was flat during the previous month.

Strong typography It may hinder the uptrend of the marketwith investors potentially interpreting the aggressive spending as a signal to Fed policymakers that aggressive interest rate increases could continue.

All eyes were on the target (TGT) as it fell 15% in pre-market trading after a third-quarter earnings report that brought in wide margins and weak guidance for the holiday quarter. The retailer has been pressured by a slowdown in consumer spending on discretionary goods and store looting Gross margin reduced by $400 million so far this year.

“In the final weeks of the quarter, sales and earnings trends eased significantly, as guests’ shopping behavior was increasingly impacted by inflation, rising interest rates and economic uncertainty,” Chairman and CEO Brian Cornell said in the earnings release. Third-quarter earnings performance was well below our expectations.”

In other pockets of the market, the US dollar lost ground while oil rose slightly as geopolitical tensions had yet to fade A Russian-made missile hit Poland On Tuesday, he renewed fears of an escalation of the Russian war in Ukraine. President Joe Biden met with NATO allies on Wednesday at the G20 meeting in Bali, Indonesia Defuse fears while affirming US officials will support Poland as it investigates whether the missile was launched from Russia.

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Back in home territory, stocks have held up so far this week after a softer CPI reading on Thursday spurred a rally. The producer price index for October, another key measure of inflation, Ignite this optimism in Tuesday’s session, along with comments from Federal Reserve members in recent days that indicated a possible slowdown in rate hikes.

“We should all keep in mind that Fedspeak is pretty divergent right now, and you can get a hawkish or a dovish view depending on which official you ask,” said Mike Lowengart, head of model portfolio creation at Morgan Stanley’s Global Investment Desk. On a note. “The market is also grasping for the impact of inflation on the consumer, with headline retail earnings beating expectations and retail sales coming in.”

WASHINGTON, DC – MAY 23: (LR) Federal Reserve Vice Chairman Lyle Brainard shakes hands with Jerome Powell on May 23, 2022 in Washington, DC. (Photo by Drew Angerer/Getty Images)

On the earnings front, non-Target retail earnings have beat analyst estimates so far.

Lowe’s home improvement store (a little) Beat analyst expectations Wednesday. Shares were up nearly 2% before the open even as the company trimmed maximum revenue guidance for the full year.

megastore walmart (wmt) took advantage of Increase the value of spending by customers due to inflation and a “noticeable” improvement in the inventory glut, while higher prices helped offset fewer transactions at Home Depot (HD).

Another round of peers in the sector is still on board, with results from TJX Companies (TJX) and Victoria’s Secret (VSCO) Wednesday. nvidia (NVDA) is another headline on the earnings schedule.

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Digital World Acquisition Company (DWAC), a special purpose acquisition company set to merge with Donald Trump’s media company, extended this week after the former president Officially entered the 2024 presidential race Tuesday. Shares rose 5% in pre-market trading.

Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @employee

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