Stock futures edge lower ahead of retail sales data; trade worries linger

U.S. stock-index futures pointed to a soft start for Wall Street Wednesday as investors awaited data on April retail sales, while keeping an eye on the state of trade talks between the U.S. and China, after an escalation of the tariff battle between the world’s two largest economies.

Futures on the Dow Jones Industrial Average YMM9, -0.55% were off 94 points, or 0.4%, at 25,476, while S&P 500 futures ESM9, -0.58% declined 9.7 points, or 0.4%, to 2,829.50. Nasdaq-100 futures NQM9, -0.59% were off 26.25 points at 7,394, also a fall of 0.4%.

Stocks ended higher Tuesday, partially bouncing back from a rout the previous session that analysts tied to China’s decision to retaliate against the U.S. decision at the end of last week to raise tariffs on $200 billion of Chinese imports to 25% from 10% and to prepare to put tariffs on a range of other goods.

Opinion: Washington and Wall Street wake up to the reality that Beijing is happy to walk away

The Dow DJIA, +0.82% finished 207.06 points higher, a gain of 0.8%, at 25,532.05, while the S&P 500 SPX, +0.80% rose 22.54 points, or 0.8%, to 2,834.41. The Nasdaq Composite COMP, +1.14% advanced 87.47 points, or 1.1%, to close at 7,734.49.

Trump on Tuesday appeared to soften rhetoric around trade, calling the dispute a “squabble” and repeating expectations for a positive meeting with Chinese leader Xi Jinping next month in Japan.

Investors might look to April retail sales at 8:30 a.m. Eastern for clues to the health of the U.S. consumer. Economists surveyed by MarketWatch look for sales to show a 0.1% uptick after a 1.6% rise in March. Excluding autos, sales are expected to show a 0.7% rise.

Meanwhile, China’s economic activity cooled last month, with data released Wednesday showing a slowing in factory production, investment and retail sales.

Shares of Macy’s Inc. M, +1.02%rose 4.8% in premarket action Wednesday, after the retailer beat analyst estimates for first-quarter profits, but reported falling revenue that was shy of expectations.

Alibaba Group Holding Ltd. BABA, +2.84% stock rose 2.9% before the bell Wednesday, after the China-based e-commerce giant reported fiscal fourth-quarter earnings and revenue that rose above expectations.

“With Donald Trump playing down trade tensions between the United States and China as a ‘little squabble,’ there is cautious optimism that both sides will eventually reach a trade deal, with investors potentially looking at the G-20 meeting in Japan next month as a possible target for a breakthrough in trade relations,” said Han Tan, market analyst at FXTM, in a note.

Investors will also see the May Empire state index of activity in the New York region at 8:30 a.m. Eastern Time, while data on industrial production and capacity utilization for April is set for release at 9:15 a.m.

At 10 a.m., March data on business inventories and the National Association of Home Builders May index are set to hit the tape.

Randal Quarles, the Fed’s vice chair for supervision, is due to testify before Congress at 9:30 a.m.

Asian markets closed mostly higher on Wednesday, as Japan’s Nikkei 225 NIK, +0.58% rose 0.6%, Hong Kong’s Hang Seng Index HSI, +0.52% added 0.5%, while the Shanghai Composite SHCOMP, +1.91% advanced 1.9%. In Europe, stocks were mostly under pressure, as reflected by a 0.3% decline for the Stoxx Europe 600 SXXP, -0.57%

Crude oil CLM9, -1.17% prices were on the retreat, down 1.2%, while the price of gold GCM9, +0.34% advanced 0.2%. The U.S. dollar DXY, +0.13% meanwhile, was flat.

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