S&P 500, Nasdaq Futures Slip Amid Retail Earnings, Oil's Retreat — Walmart Jumps On Q2 Report

The U.S. index futures point to tentativeness going into Tuesday's session following the recent strong gains.

At the time of going to press, the Dow futures were down 0.05%, while the S&P futures and the Nasdaq 100 futures had slipped 0.14% and 0.17%, respectively. After opening Monday’s session lower, the major U.S. averages launched into a rally in late morning trading and closed moderately higher. Investors largely shrugged off weak China data and a regional U.S. manufacturing reading that showed an unexpected contraction. "Given the economic situation the equity market strength is somewhat shocking," MIchael Lee, Founder of Michael Lee Strategy, said, which "usually means risk is to the upside." That and "all of the cash on the side lines, and bearish positioning among hedge funds says to me this rally has legs."

At last check, the SPDR S&P 500 ETF Trust SPY was slipping 0.24% to $427.84 and the Invesco QQQ Trust QQQ was seen retreating 0.24% to $332.26, according to Benzinga Pro data. Big tech and financials are broadly weaker as retail names rose, buoyed by strong Walmart results.

Trading Cues: Two key economic data are due for release ahead of the market open, and retail earnings kick off in earnest.

• The U.S. Census Bureau is scheduled to release the housing starts and building permits data for July at 8:30 a.m. ET. The former metric, a measure of new residential construction, is expected to decline 1.9% month-over-month, less than the 2% drop in June. Building permits, which refer to permits issued for construction, may have fallen 3.3% in July compared to a more modest 0.6% drop in June.
• At 9:15 a.m. ET, the Federal Reserve will release the industrial production report for July. Economists, on average, estimate the pace of industrial output growth to have remained unchanged at an anemic 0.2% compared to the previous month.

Read Benzinga's story on BofA's inflation outlook and its implication for the market.

Pre-Market Movers:

• Energy stocks would once again be in the spotlight as September WTI crude futures are seen extending their losses. A barrel of light sweet crude is currently trading at $89, down 0.46%.
• Home Depot, Inc. HD shares have recouped most of their early losses. The home improvement retailer reported second-quarter earnings and revenue that exceeded expectations. The company also affirmed its full-year guidance.
• Walmart, Inc. WMT stock is seen rallying after the retail giant reported fiscal 2023 second-quarter results that exceeded estimates and issued a strong outlook.
• Bed Bath & Beyond, Inc. BBBY — attracting high attention from retail investors — is seen snapping a four-session losing streak.

Overseas Markets: The Asian markets showed tentativeness before closing Tuesday’s session mixed. Japan’s Nikkei 225 average paused for a breather after its recent gains and Hong Kong’s Hang Seng Index ended down a little over 1%. The key averages of China closed modestly higher.

European stocks are seeing moderate gains, thanks in part to the strength seen among miners and defensive stocks such as telecoms and utilities.