S&P, Nasdaq Futures Signal Slowing Momentum As Investors Digest Hawkish Fed Talk, Disney Earnings

U.S. index futures are modestly higher early Thursday following the inflation-data-induced rally seen in the previous session.

Momentum Slows? The muted sentiment reflected by the index futures could be attributable to hawkish comments from some Fed officials.

Minneapolis Federal Reserve President Neel Kashkari said in a public address late afternoon on Wednesday that the central bank is “far, far away from declaring victory” on inflation. The same sentiment was echoed by San Francisco Fed President Mary Daly in an interview with the Financial Times. She did not rule out a third consecutive 0.75% rate hike at the September FOMC meeting. Still, what that means for stocks and the market is up for debate. "The final nail in the coffin for bears looking for new lows will be the September CPI also coming in lower than expected - resulting in the Fed doing less than expected in September," Thomas Hayes, Chairman & Managing Member at Great Hill Capital told Benzinga.

At press time, the S&P and Dow futures were up 0.17% and 0.28%, respectively. The Nasdaq 100 futures were up a more modest 0.1%, according to Benzinga Pro data. Earnings remain a focus for individual equities. "Both earnings and estimates have held up better than feared for Q2. With inflation backing off, managers who stayed in cash and didn't believe the huge move off June the lows are now being forced back into the market. The tax on buybacks will frontload billions in buybacks before year end and put a floor in the market," Hayes added.

Main Street Data: Economic data for the day may not be market-moving. The Labor Department is set to release a duo of reports at 8:30 a.m. ET. The producer price inflation report for July is expected to show a decline in the annual rate to 10.4% from 11.3% in the previous month. The core reading that excludes food and energy, is expected to decline to 7.6% from 8.2% in June.

The weekly jobless claims report will likely show that the number of individuals seeking unemployment benefits increased to 263,000 in the week ended Aug. 6 from 260,000 in the previous week.

Corporate Tidings: Earnings news flow continues, with the reporting season set to taper off in the coming weeks.

Walt Disney Company DIS could potentially give the Dow Industrials Average a lift after the media and entertainment giant reported forecast-beating results.

Among the key companies set to report earnings before the market opens are Cardinal Health, Inc. CAH and department store retailer Dillard’s, Inc. DDS.

Read Benzinga's story on Wall Street's year-end price target for the S&P 500 Index.

Global Cues: The Asian markets were all in a sea of green on Thursday, drawing inspiration from the strong close on Wall Street overnight. Hong Kong’s Hang Seng Index and China’s Shanghai Composite Index led the gains in the region, each advancing over 2%. Japan was closed for the “Mountain Day” holiday.

Thursday, European stocks are showing tentativeness. The U.K.’s FTSE Composite Index, France’s CAC 40 and Germany’s DAX are all trading modestly lower in early trading.

The WTI Crude oil futures are higher for a third straight session. The September futures are currently up about 1% and knocking at the $93-a-barrel threshold.

Wednesday, tech stocks led the U.S. market higher, as they clawed their way back from their recent massive losses. With Wednesday’s 2.89% rally, the Nasdaq Composite Index closed at 12,854.80, reentering the bull-market territory. From the June 16 low of 10,565.14, the index has now rallied over 20%.

The upside was catalyzed by the U.S. Labor Department’s consumer price inflation report for July, which showed a cooling off of retail price inflation.

The SPDR S&P 500 ETF Trust SPY was up 0.21% at $421 in premarket trading on Thursday and the Invesco QQQ Trust QQQ traded 0.13% higher at $326.35.