U.S. stock index futures rose in overnight trading on Thursday as Wall Street posted extended gains after strong retail sales and jobless claims data helped ease concerns about a slowing economy.
Weak inflation data earlier in the week boosted bets that the Federal Reserve will cut interest rates in September, adding to the positive sentiment.
The S&P 500 rose 0.2% to 5,576.25 points, while it was up 0.2% at 19,624.75 points by 19:22 ET (23:22 GMT). The S&P 500 rose 0.2% to 40,746.0 points.
Retail Sales, Jobless Claims Beat Expectations
July data came in stronger than expected, boosting hopes that consumer spending will remain resilient.
This came coupled with data showing a lower-than-expected number last week, which also showed that the labor market remained strong.
The readings helped dispel concerns about an approaching U.S. economic recession – fears that hit Wall Street last week.
But not all the data is positive. The US manufacturing sector contracted more than expected in July, amid a global slowdown in manufacturing.
Interest rate cut by 25 basis points in September
But the strong economic readings have reinforced the idea that the Fed will not need to cut interest rates by a large margin to boost the economy.
Inflation data released earlier in the week showed traders had shifted to pricing in a 25 basis point cut in September, compared with previous bets that a 50 basis point cut was more likely.
This shift became particularly evident after the release of the Consumer Price Index (CPI) inflation data on Wednesday. While the CPI fell slightly more than expected on a year-over-year basis, inflation is still higher than last month.
Still, continued signs of falling inflation should give the Federal Reserve enough room to start cutting interest rates as early as next month. A host of other major central banks have already started cutting rates.
Federal Reserve Chairman Jerome Powell is widely expected to provide further signals on rate cuts at next week’s Jackson Hole symposium.
Wall Street at 2-week high as volatility eases
Wall Street indexes rose to their highest levels in two weeks on Thursday, resuming their advance after sharp volatility over the past week and returning to their recent record highs.
The Dubai Financial Market General Index rose 1.6% to 5,543.22 points, while the Dubai Financial Market General Index jumped 2.3% to 17,591.72 points, and the Dubai Financial Market General Index rose 1.4% to 40,563.06 points.
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