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* Home Depot down after lowering its sales and profit targets for the current year
* US producer prices rise less than expected in July
* Starbucks rises after Chipotle boss Brian Niccol named CEO
* Futures: Dow up 0.24%, S&P 500 up 0.53%, Nasdaq up 0.82%.
August 13 (Reuters) –
Wall Street was set to open higher Tuesday after producer price data showed easing inflation pressures, keeping the Federal Reserve on track for a September rate cut, while Starbucks soared after naming Chipotle boss Brian Niccol as CEO.
Stocks wavered Monday, with the S&P 500 nearly flat and the Nasdaq posting modest gains, following a choppy week marked by mixed economic reports and a rate hike by Japan’s central bank.
U.S. producer prices rose less than expected in July, as rising goods costs were tempered by cheaper services, indicating that inflation continued to moderate. In the 12 months to July, the PPI rose 2.2% after rising 2.7% in June.
“This gives the Fed more room to lower rates later in the year, which explains the current market reaction,” said Dave Grecsek, managing director of investment strategy and research at Aspiriant.
Yields on 10-year and 2-year Treasury notes fell after the data was released, while traders’ bets on a 50 basis point rate cut rose to more than 50% after the report, according to the CME’s FedWatch tool.
Markets expect interest rates to be cut by a total of 100 basis points by the end of 2024.
Investors now await the all-important July consumer price index (CPI) figures on Wednesday and retail sales data on Thursday to confirm bets that the U.S. central bank will aggressively cut rates.
As of 08:46 a.m. ET, the Dow E-minis were up 96 points, or 0.24%, the Nasdaq 100 E-minis were up 153.75 points, or 0.82%, and the S&P 500 E-minis were up 28.25 points, or 0.53%.
Starbucks was the top performer on the S&P 500 in premarket trading, rising 9.8% after it named Chipotle Mexican Grill chief Brian Niccol to lead the company.
Brian Niccol
as Chairman and CEO, replacing Laxman Narasimhan.
Chipotle fell 7.8%.
Home Depot pared its losses and was down 0.3% after the home improvement chain reported a drop in annual profit.
forecast a drop in its annual profit
and a larger decline in its annual comparable sales.
Chipmaker Nvidia led gains among mega-cap and growth stocks with a 3.6% gain.
Roger Federer-backed On Holding beat analysts’ estimates for second-quarter revenue on strong demand from customers looking for trendy products. Its shares rose 2.6%.
BuzzFeed jumped 17.4% after the digital media company narrowed its second-quarter net loss to $6.6 million from $22.5 million a year earlier.
Investors now await comments from Atlanta Fed President Raphael Bostic, due at 1:15 p.m. ET, on the outlook for the U.S. economy.
Wall Street’s gauge of fear, the CBOE Volatility Index, was at 19.8 points after falling to 18.87 on Monday. (Reporting by Shubham Batra, Lisa Pauline Mattackal and Shashwat Chauhan in Bengaluru; Writing by Saumyadeb Chakrabarty and Maju Samuel)
