Stock futures TK after Walmart, Home Depot help build on recent rally

Traders work during the New York Stock Exchange (NYSE) opening bell on Wall Street in New York on August 16, 2022.

Angela Weiss | AFP | Getty Images

Stock futures were little changed on Tuesday night after two of the country’s big chain stores, Walmart and Home Depot, pushed the Dow Jones and S&P 500 higher and set the stage for more retail profits this week.

Futures contracts linked to the Dow Jones Industrial Average fell 17 points, or 0.5%. S&P 500 and Nasdaq 100 futures fell 0.04% and 0.07% respectively.

In regular trading, the Dow Jones ended the day up 239 points, or 0.7%, and the S&P added 0.2%. The Nasdaq Composite slipped 0.2%.

Retailers led the market higher thanks in large part to strong quarterly results from Walmart and Home Depot, which were the Dow 30-stock biggest gainers, and lured others like Target, Best Buy and Bath. & Body Works with them.

The Dow notched its fifth straight day of gains. Meanwhile, the S&P 500 is in its fifth straight week as investors continue to assess the strength of this rally. The broad stock index is now up 18% from its June lows.

“This market has been so resilient,” Brynn Talkington, managing partner of Requisite Capital Management, said on CNBC’s “Closing Bell: Overtime.” “As we approach the end of earnings, earnings will beat by a median of about 7%.”

The Federal Reserve and its plans to continue raising rates and shrinking the size of its balance sheet give it “a lot of breathing room” in this market. “Earnings have always been strong, but … the Fed’s balance sheet hasn’t budged,” she said.

Gabriela Santos, global market strategist at JP Morgan Asset Management, agreed that investors should be alert to greater ongoing volatility.

“Real yields are expected to rise further in the fall, which could once again put pressure on growth stocks,” she said. “[With] the macro story that has recently taken hold and led to broader gains in the market – it’s far too early to have any belief that we really know the shape of inflation in the fall or year next, or that we know how the Fed will react to this inflation.”

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