NEW YORK, Aug 15 — Wall Street’s main indexes were set to open lower today after a sharper-than-expected rise in US retail sales stoked concerns the Federal Reserve could keep interest rates higher for longer.
The Commerce Department’s report showed retail sales grew 0.7 per cent last month against expectations of a 0.4 per cent rise, suggesting the US economy remains strong.
Data for June was revised higher to reflect sales growth of 0.3 per cent, compared with 0.2 per cent reported earlier.
The yield on the 10-year benchmark Treasury note also climbed to hit a near 10-month high, and was last up at 4.27 per cent. Traders’ odds of a pause on hikes by the Fed at its September meeting fell to 86.5 per cent from 89 per cent before the data.
“Given the fact that we are so hyper-vigilant about the Fed and what their next step will be in September, it isn’t surprising that the market reacted with jitters,” said Peter Andersen, founder of Andersen Capital Management in Boston.
“The retail sales number might indicate that the Fed would continue to raise rates.”
Rising Treasury yields have pressured equities after hotter-than-expected producer prices data last week fuelled fears the Fed could keep rates higher for longer than previously anticipated.
Nvidia was an outlier among major technology and growth stocks, rising 2.2 per cent in premarket trading today after UBS and Wells Fargo lifted their price targets on the stock.
Tesla slipped 0.7 per cent after the electric automaker introduced two cheaper versions of its Model S sedan and Model X SUV in the United States.
US-listed shares of Chinese companies JD.Com, Alibaba Group and Bilibili slid between 0.7 per cent and 1.2 per cent following another round of disappointing economic data from China which prompted Beijing to cut key policy rates.
At 8:44 a.m. ET, Dow e-minis were down 253 points, or 0.72 per cent, S&P 500 e-minis were down 27.5 points, or 0.61 per cent, and Nasdaq 100 e-minis were down 85.75 points, or 0.56 per cent.
Among other stocks, General Motors fell nearly 1 per cent in premarket trading after Berkshire Hathaway cut its stake in the automaker.
Warren Buffett’s Berkshire disclosed a new investment in homebuilder D.R. Horton, lifting its shares up 2.2 per cent.
JPMorgan Chase, Bank of America and Wells Fargo slipped between 1.4 per cent and 1.8 per centon a report that ratings agency Fitch could downgrade big US banks. — Reuters