U.S. Stocks May Show A Lack Of Direction In Early Trading

The major U.S. index futures are currently pointing to a roughly flat open on Friday, with stocks likely to show a lack of direction in early trading following the upward move seen over the two previous sessions.

Traders may take a step back to assess the recent strength in the markets, which lifted the S&P 500 to a record intraday high above 7,800 during Thursday’s session.

The broad market index also ended yesterday’s trading at a record closing high, while the tech-heavy Nasdaq reached its highest closing level in over two months.

The futures remained little changed even after the Commerce Department released a report showing an unexpected decline in U.S. retail sales in the month of July.

The Commerce Department said retail sales fell by 0.6 percent in July after rising by 0.2 percent in June. Economists had expected retail sales to inch up by 0.1 percent.

The unexpected decrease in retail sales partly reflected a significant pullback in sales by motor vehicle and parts dealers, which tumbled by 1.8 percent in July after surging by 2.4 percent in June.

However, excluding the slump in auto sales, retail sales still dipped by 0.3 percent in July after slipping by 0.2 percent in June. Ex-auto sales were expected to increase by 0.2 percent.

Stocks moved mostly higher during trading on Thursday, adding to the moderate gains posted in Wednesday’s session. The major averages all moved to the upside on the day, with the S&P 500 reaching a new record closing high.

The Nasdaq led the way higher, advancing 214.54 points or 0.8 percent to a two-month closing high of 26,803.03. The S&P 500 also climbed 50.49 points or 0.7 percent to 7,798.99, while the narrower Dow posted a more modest gain, inching up 69.72 points or 0.1 percent to 53,839.99.

The strength on Wall Street came after the Labor Department released a report showing producer prices in the U.S. unexpectedly came in flat in the month of July.

The Labor Department said its producer price index for final demand was unchanged in July after edging down by a revised 0.1 percent in June.

Economists had expected producer prices to rise by 0.2 percent compared to the 0.3 percent dip originally reported for the previous month.

The report also said the annual rate of growth by producer prices slowed to 4.7 percent in July from 5.5 percent in June. The annual rate of growth was expected to slow to 4.9 percent.

Combined with yesterday’s report showing only a slight uptick in consumer prices and last Friday’s report showing an unexpected decrease in jobs, the data added to optimism about the outlook for interest rates.

According to CME Group’s FedWatch Tool, the chances the Federal Reserve raised rates by a quarter point at its next meeting in September have fallen to 34.6 percent from 55.0 percent a week ago.

Stocks also benefited from a steep drop by the price of crude oil, with U.S. crude oil futures plunging by 2.4 percent on the day.

Crude oil prices came under pressure as worries about the outlook for demand are overshadowing the supply concerns raised by the ongoing conflict in the Middle East.

Computer hardware stocks extended the rally seen over the past several sessions, with the NYSE Arca Computer Hardware Index spiking by 4.7 percent to a new record closing high.

Significant strength was also visible among software stocks, as reflected by the 2 percent jump by the Dow Jones U.S. Software Index.

Telecom, transportation and commercial real estate stocks also saw notable strength, while gold stocks came under pressure amid a pullback by the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are rising $0.22 to $81.47 a barrel after plunging $2.02 to $81.25 a barrel on Thursday. Meanwhile, after tumbling $47.10 to $4,420.40 an ounce in the previous session, gold futures are climbing $13.50 to $4,433.90 an ounce.

On the currency front, the U.S. dollar is trading at 158.86 yen versus the 159.48 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1567 compared to yesterday’s $1.1527.

Asia

Asian stocks ended mixed on Friday, even as signs of slowing U.S. inflation and a retreat in oil prices raised optimism that the U.S. Federal Reserve would hold interest rates steady next month.

The U.S. dollar was subdued in Asian trading ahead of retail sales and consumer sentiment readings due later in the day. Gold dipped to $4,335 an ounce but was on track for a second weekly gain on eased concerns over the Fed’s rate path.

Brent crude futures surged above $88 a barrel, recovering losses from the previous session as talks to end the Middle East conflict and reopen the Strait of Hormuz remained deadlocked.

China’s Shanghai Composite Index fluctuated before finishing marginally higher at 3,927.18. Hong Kong’s Hang Seng Index slumped 1.1 percent to 25,116.85, hitting a three-week low and marking its fourth consecutive session of losses.

Japanese markets rose notably, while the yen held steady despite reports suggesting that the Bank of Japan is eying a September rate hike and could move more aggressively with subsequent increases to stem the currency’s decline.

Prime Minister Sanae Takaichi’s government was said to support an interest-rate hike. The Nikkei 225 Index climbed 0.6 percent to 68,713.80, while the broader Topix Index rose 0.5 percent to 4,197.20.

SoftBank Group shares rose 2.9 percent and Kioxia Holdings surged 3.8 percent amid expectations that AI data center demand will fuel a multi-year chip shortage.

Seoul stocks ended sharply higher for a fifth consecutive session, with technology stocks leading the surge on renewed optimism over AI spending.

Investors also cheered data that showed South Korean export prices soared 49.1 percent year-on-year in July, marking the largest increase since 1998 during the Asian financial crisis and signaling continued demand for Korean goods.

The Kospi Index shot up 2.4 percent to 6,977.94. Market bellwether Samsung Electronics rose 2.4 percent and rival chipmaker SK Hynix advanced 3.3 percent following SanDisk’s cash return announcement.

Australian markets ended lower as softer commodity prices and earnings uncertainty weighed on the mining and banking sectors.

The benchmark S&P/ASX 200 Index dropped 0.8 percent to 9,115.20, while the broader All Ordinaries Index settled 0.7 percent lower at 9,313.20.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index edged up by 0.2 percent to 13,854.38 after data showed the country’s manufacturing sector continued to expand solidly in July.

Europe

European stocks are mostly higher on Friday as investors digest regional inflation data and closely monitor ongoing diplomatic efforts to reopen the Strait of Hormuz amid persistent threats.

German wholesale price inflation accelerated to 5.3 percent in July from 4.9 percent in June as a result of higher energy prices, Destatis reported. On a monthly basis, wholesale prices gained 0.2 percent, reversing a 0.7 percent fall in June.

The annual inflation rate in France accelerated to 2.1 percent in July from 1.8 percent in June, matching expectations.

The German DAX Index is up by 0.8 percent, the French CAC 40 Index is up by 0.1 percent and the U.K.’s FTSE 100 Index is just above the unchanged line.

In corporate news, French specialty vaccine maker Valneva soared 19 percent after the European Medicines Agency validated the marketing application for its Lyme disease vaccine candidate.

British insurer Aviva has also shown a notable move to the upside after beating first-half profit expectations.

Software stocks are also rising after reports emerged that U.S. private equity firm Silver Lake in in talks to acquire Workday.

Deutsche EuroShop has also risen. The German real estate investment company confirmed its outlook after posting solid operational results for the first half of 2026.

Meanwhile, telecommunications and web content provider Freenet has fallen after reporting a 30 percent decrease in second quarter net income.

U.S. Economic News

A report released by the Commerce Department on Friday showed an unexpected decline in retail sales in the U.S. in the month of July.

The Commerce Department said retail sales fell by 0.6 percent in July after rising by 0.2 percent in June. Economists had expected retail sales to inch up by 0.1 percent.

The unexpected decrease in retail sales partly reflected a significant pullback in sales by motor vehicle and parts dealers, which tumbled by 1.8 percent in July after surging by 2.4 percent in June.

However, excluding the slump in auto sales, retail sales still dipped by 0.3 percent in July after slipping by 0.2 percent in June. Ex-auto sales were expected to increase by 0.2 percent.

At 10 am ET, the University of Michigan is scheduled to release its preliminary reading on consumer sentiment in the month of August. The consumer sentiment index is expected to dip to 54.2 in August from 55.2 in July.

The Commerce Department is also due to release its report on business inventories in the month of June at 10 am ET. Business inventories are expected to rise by 0.2 percent in June after climbing by 0.3 percent in May.