By Peter Nurse
Investing.com -- U.S. stocks are seen opening higher Wednesday, adding to the previous session’s gains ahead of the release of more quarterly earnings from the retail sector as well as monthly retail sales data.
At 07:00 ET (12:00 GMT), the Dow Futures contract was down 20 points or 0.1%, S&P 500 Futures traded 3 points or 0.1% lower, and Nasdaq 100 Futures dropped 20 points or 0.2%.
The main stock indices closed higher Tuesday after producer prices for October showed inflation cooling, stoking hopes the Federal Reserve can shortly start to ease back on its pace of interest rate hikes.
The blue-chip Dow Jones Industrial Average closed 56 points or 0.2% higher, the broad-based S&P 500 climbed 0.9%, and the tech-heavy Nasdaq Composite rose 1.5%.
The Fed is trying to tame inflation without tipping the U.S. economy into recession, and the latest factory prices data, coupled with last week’s consumer prices release, point to the U.S. central bank hiking by 50 basis points in December. This would be a smaller rise than the four consecutive 0.75 percentage point increases it has already done this year.
Attention now turns to the retail sales reading for October, at 08:30 ET (13:30 GMT), to see how discretionary spending is holding up as consumers struggle with soaring prices. The month-to-month reading is expected to rise 1% after remaining flat the prior month.
This is a big week for retail earnings, too, which started with strong earnings from Walmart (NYSE:WMT), as the retail giant lifted its annual sales and profit forecast as demand for groceries held up.
Lowe's (NYSE:LOW) raised its full-year profit forecast Wednesday, encouraged by higher prices and steady demand for home improvement products, but Target (NYSE:TGT) cut its fourth quarter outlook, after seeing sales slow in late October.
Chipmaker Nvidia (NASDAQ:NVDA) is also expected to report quarterly earnings.
On the political front, investors are still assessing the latest developments following a fatal missile attack on a Polish village on the border with Ukraine, as well as former President Donald Trump's decision to enter the 2024 presidential race.
Oil prices stabilized Wednesday, following an unsubstantiated report that an oil tanker has been hit by a drone off the coast of Oman, potentially impacting supply in an already tight market.
The crude market had traded lower earlier Wednesday, following mixed U.S. inventories data from the American Petroleum Institute. While crude inventories shrank almost 6 million barrels last week, far more than expected, gasoline inventories grew around 1.7M barrels, suggesting waning demand from the biggest economy in the world.
Official data from the Energy Information Administration are due later in the session for confirmation.
By 07:00 ET, U.S. crude futures traded 0.2% lower at $86.72 a barrel, while the Brent contract rose 0.1% to $93.94.
Additionally, gold futures rose 0.6% to $1,787.15/oz, while EUR/USD traded 0.7% higher at 1.0417.