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Wednesday, July 28, 2021

Stock Futures Creep Up Ahead of Retail Sales Data

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U.S. stock futures edged up ahead of retail sales data that are expected to provide fresh insight into the strength of the American consumer.

Futures tied to the S&P 500 added 0.1%, with the broad-market index on track for its worst weekly performance in a month. Nasdaq-100 futures also advanced 0.1%, pointing to muted gains in technology stocks after the opening bell.

In premarket trading,

Intel

INTC -1.26%

rose 1.2% in after hours trading when The Wall Street Journal reported that the semiconductor giant was exploring a deal to acquire chip maker GlobalFoundries for around $30 billion. Moderna jumped 8% after S&P Global said it would add the pharmaceutical company to the S&P 500 index, effective as of July 21.

U.S.-listed Chinese ride-hailing firm

Didi Global

DIDI -2.06%

tumbled 7% after state security and police officials were sent to the company’s offices Friday as part of a cybersecurity investigation.

Financial firms

State Street

STT -0.61%

and Charles Schwab are scheduled to post their quarterly results ahead of the opening bell, with earnings season in full swing.

Stocks traded choppily this week as investors digested a higher-than-expected inflation reading Tuesday. This was followed by Federal Reserve Chairman

Jerome Powell

seeking to reassure markets that the central bank sees the rise in prices as uncomfortable but transitory and isn’t in a hurry to adjust its supportive policies.

The inflation rate reached a 13-year high recently, triggering a debate about whether the U.S. is entering an inflationary period similar to the 1970s.

“The Fed is still being pretty patient, Powell has made it clear that they will remain pretty accommodative for some time,” said Salman Baig, a multiasset investment manager at Unigestion. “That’s a relatively good environment for risk taking—good growth, bond yields being relatively stable, investors will be OK with taking on more risk.”

In bond markets, the yield on the benchmark 10-year Treasury note ticked up to 1.325% Friday from 1.297% Thursday, reversing course after declining for two consecutive days.

Overseas, the pan-continental Stoxx Europe 600 was flat. Swedish telecommunications equipment maker

Ericsson

fell 8.5% after reporting a sharp decline in sales in China, and revenue growth that came in below analysts’ estimates.

Luxury label

Burberry

slipped 3% on concerns about the coming departure of its chief executive, despite an increase in quarterly comparable sales in line with pre-pandemic levels.

U.S. retail sales are seen falling for a second straight month.



Photo:

brendan mcdermid/Reuters

Most major benchmarks in Asia ended the week on a downward note. The Shanghai Composite Index declined 0.7% and Japan’s Nikkei 225 fell 1%.

Retail sales for June in the U.S. are set to be released at 8:30 a.m. ET. Economists expect a drop for the second straight month, as consumers spent more on services and less on big-ticket items like cars. A gauge of consumer sentiment by the University of Michigan is scheduled for 10 a.m.

Oil prices edged up, with global benchmark Brent crude rising 0.4% to $73.79. This week saw updated forecasts from the Organization for Petroleum-Exporting Countries and the International Energy Agency, which both expect a strong pickup in oil demand next year.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

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