Wall St futures subdued as Home Depot puts retail earnings in spotlight

By Johann M Cherian and Sanchayaita Roy

(Reuters) -U.S. stock index futures were muted on Tuesday as investors assessed retailer Home Depot’s earnings for insights on the health of the American consumer and awaited a key Federal Reserve conference scheduled later in the week.

Consumer spending accounts for around 70% of the total U.S. economy and traders are keen to know the impact U.S. tariffs have had on corporate forecasts and individual expenditure. Data last week showed the levies had dented consumer confidence in July.

Home-improvement retailer Home Depot’s quarterly results missed estimates as homeowners reduced spending on big renovations and instead focused on smaller DIY projects.

Its shares slipped 0.6% in choppy premarket trading, with investors watching out for any tariff comments from the company’s earnings call later in the day.

Rival Lowe’s shares were down 1.7%, ahead of its results on Wednesday, while earnings from big-box retailers Walmart and Target are lined up for later this week.

On the policy front, remarks from Fed Vice Chair for Supervision Michelle Bowman are due later in the day.

Bowman, who is under consideration for the central bank’s top job when Chair Jerome Powell’s term ends next year, has voiced support for at least three interest rate cuts this year to support the labor market, in line with President Donald Trump’s calls for lower borrowing costs.

Interest rate futures point to a total of two rate cuts this year worth 25 basis points each, with the first expected in September, according to data compiled by LSEG.

“It is perfectly possible to make a case for immediate U.S. rate cuts given the economic damage of trade taxes and policy uncertainty,” said Paul Donovan, chief economist at UBS Global Wealth Management.

At 07:03 a.m. ET, Dow E-minis were up 4 points, or 0.01%, S&P 500 E-minis were down 7.25 points, or 0.11%, and Nasdaq 100 E-minis were down 33.75 points, or 0.14%.

Wall Street’s main indexes have recovered since their April lows, when trade uncertainty stuck global markets, and have picked up steam following a better-than-expected earnings season and on the rate-cut expectations.

The key event this week is the Fed’s annual symposium at Jackson Hole, Wyoming, from Aug. 21-23, where Powell’s comments will be scrutinized for any clues on the central bank’s outlook on the economy and monetary policy.

Offering a spot of relief, ratings agency S&P Global affirmed its ‘AA+’ credit rating on the U.S., saying the revenue from Trump’s tariffs will offset the fiscal hit from his recent tax-cut and spending bill.

On the data front, a report later in the day is expected to show single-family homebuilding in July was lower than the month before, when it dropped to an 11-month low.

Intel jumped 5.4% after the chipmaker got a $2 billion capital injection from Japan’s SoftBank Group.

Palo Alto Networks surged 6% after the cybersecurity company forecast fiscal 2026 revenue and profit above estimates.

Medtronic was last down 1.7%, after a report said the medical device maker will add two new directors to its board and form new committees after Elliott Investment Management became one of its largest shareholders.

Crude prices dropped 1% as traders weighed the possibility that talks between Russia, Ukraine and the U.S. to end the war in Ukraine could lead to the lifting of sanctions on Russian crude, raising supply.

(Reporting by Johann M Cherian and Sanchayaita Roy in Bengaluru; Editing by Devika Syamnath)