Market Snapshot: U.S. Stocks Shape Up To Rebound, As Focus Turns To Retail Sales

Wall Street was poised for an upbeat session Wednesday, as investors looked ahead to data on U.S. retail sales, which could either strengthen or weaken the case for the Federal Reserve to raise interest rates four times this year.

The gains for U.S. stock futures indicated a rebound from the prior day, when traders may have used the departure of Secretary of State Rex Tillerson as an excuse to book some profits.

What are stock-market futures doing?

Futures for the Dow Jones Industrial Average YMH8, +0.40%  jumped 98 points, or 0.4%, to 25,148, while those for the S&P 500 index ESH8, +0.29%  climbed 7.95 points, or 0.3%, to 2,780.75. Futures for the Nasdaq-100 index NQH8, +0.41%  added 29 points, or 0.4%, to 7,112.25.

The gains come after all three benchmarks ended lower on Tuesday, with the Dow industrials DJIA, -0.68%  closing down 0.7% after being up nearly 200 points earlier in the day. The S&P SPX, -0.64%  fell 0.6%, and the Nasdaq Composite Index COMP, -1.02%  ended a seven-session winning streak with a 1% drop.

What is driving the markets?

The upbeat mood on Wednesday came as traders picked up stocks after the selloff in the previous session, when investors took profits after a period of strong gains last week. The profit taking was sparked in part by President Donald Trump’s move to fire Tillerson and to replace him with Central Intelligence Agency Director Mike Pompeo, according to some analysts.

Investors were looking ahead to the retail sales data for February, which are forecast to show a rise of 0.4%, according to economists polled by MarketWatch. After the soft inflation reading on Tuesday, analysts see the retail report as the next big test of the strength of the U.S. economy ahead of a Fed meeting next week.

What are strategists saying?

“It’s fair to say that with Friday’s weak wage growth [and] core inflation remaining constant at 1.8%, market fears over a more aggressive path to monetary policy tightening by the Fed have eased considerably,” said Jasper Lawler, head of research at London Capital Group, in a note.

“However, a solid surprise to the upside [from the retail data] today could go some way to allowing nerves to creep back into the market. In this scenario we would expect bond yields to move higher, boosting the dollar whilst weighing on U.S. equity indices,” he added.

What’s on the economic docket?

The retail sales report is scheduled to be out at 8:30 a.m. Eastern Time. At the same time, the producer price index for February is due, followed by data on business inventories for January at 10 a.m. Eastern.

See: MarketWatch’s Economic Calendar

Which stocks look like key movers?

Shares in Signet Jewelers Ltd. SIG, -0.15% dropped 5.1% ahead of the bell after the parent company for the Zales, Kay and Jared chains unveiled a restructuring plan to be carried out over the next three years.

Broadcom Ltd. AVGO, -0.62%  rose 0.8% premarket after the chip maker said it has withdrawn its hostile bid to buy Qualcomm Inc. QCOM, -4.95% following President Donald Trump’s move this week to block the deal, citing national security concerns.

Shares of Century Aluminum Co. CENX, +3.70%  rose 4% after J.P. Morgan lifted its price target on the stock to $29 from $18.

United Continental Holdings Inc.’s stock UAL, +0.83%  fell 1% before the open as the airline draws considerable flak for a dog’s death that came after a United flight attendant forced the pet into an overhead bin.

See: United had the most animal deaths in 2017

How are other markets performing?

European stocks SXXP, +0.39% traded higher after European Central Bank President Mario Draghi said a key bond-buying program will likely continue if underlying inflation in the region remains subdued, while Asian markets closed with losses.

Oil futures CLJ8, +0.76%  and the ICE U.S. Dollar Index DXY, +0.03% gained. Gold futures GCJ8, -0.05%  edged lower.

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