U.S. stocks traded in a mixed fashion Friday, with investors digesting more economic data ahead of a meeting between U.S. President Donald Trump and Russian President Vladimir Putin to discuss a potential ceasefire in Ukraine.
At 09:40 ET (13:40 GMT), the Dow Jones Industrial Average traded 200 points, or 0.4%, higher, the S&P 500 index traded largely unchanged, while the NASDAQ Composite fell 33 points, or 0.2%.
Largely positive corporate earnings have resulted in a positive week on Wall Street, with the Dow rising 1.7% week to date ahead of today’s open, and both the S&P 500 and Nasdaq adding around 1.2%.
Trump and Putin to meet
Trump and Putin are set to hold talks in Alaska later in the session to try and negotiate an end to the war in Ukraine, their first face-to-face talks since Trump returned to the White House.
The conflict has raged for over three years, and has severely disrupted the global supply chain, resulting in inflated commodity prices and the associated hit to global economic growth.
The U.S. president said earlier Friday that he would not negotiate on behalf of Ukraine in his meeting with Russian President Vladimir Putin and would let Kyiv decide whether to engage in territorial swaps with Russia.
Trump said his goal was to get the two sides to start a negotiation, with any territorial swaps to be addressed then.
"They’ll be discussed, but I’ve got to let Ukraine make that decision, and I think they’ll make a proper decision. But I’m not here to negotiate for Ukraine, I’m here to get them at a table," Trump told reporters aboard Air Force One.
Trump’s remarks are likely to offer some assurance to Ukraine, which is worried that the U.S.-Russia talks could freeze the conflict at Ukraine’s expense.
Economic data in spotlight
Investors have also been able to digest a series of economic data releases earlier in the session, as the next Federal Reserve meeting draws nearer.
U.S. import prices rebounded in July, boosted by higher costs for consumer goods, the latest indication that inflation was poised to pick up because of tariffs.
Import prices increased 0.4% last month after a downwardly revised 0.1% dip in June, the Labor Department’s Bureau of Labor Statistics said on Friday.
“The Fed will be paying close attention to this, because if import prices don’t start falling soon then that will signal U.S. corporates are fully paying the tariff and then they have the choice of either passing it onto consumers, thus boosting inflation, or absorbing it in profit margins,” ING analysts said in a note.
U.S. retail sales also increased solidly in July, rising 0.5% last month after an upwardly revised 0.9% gain in June.
"The 0.5% m/m rise in retail sales in July, paired with the upward revision to May’s and June’s data, shows households continue to spend in healthy amounts despite the threat of tariffs – especially given the increase in sales in areas which have experienced tariff-induced price pressures recently," said analysts at Capital Economics, in a note.
That said, a softening labor market and higher goods prices could curb growth in consumer spending in the third quarter.
Sentiment soured on Thursday after July producer prices ran much hotter than expected. The upside surprise lifted Treasury yields and cooled bets on larger rate cuts.
Rate markets still see a September cut as the base case. However, the probability of a quarter-point move eased from near certainty after the PPI release, while odds of a half-point cut faded.
UnitedHealth receives popular backer
The vast majority of U.S. corporates have now reported their second-quarter earnings, and, according to FactSet data, over 80% of S&P 500 companies have reported a positive EPS surprise, with similar numbers having also reported a positive revenue surprise.
Elsewhere, Unitedhealth Group (NYSE:UNH) stock soared after Warren Buffett’s Berkshire Hathaway disclosed late Thursday a new investment in the company.
The health insurer had seen its popularity slump as it became a target for many Americans upset over the direction of the nation’s healthcare, with its share price dropping 46% since January. .
Berkshire also said it sold 20 million shares of iPhone maker Apple (NASDAQ:AAPL) in the second quarter, and cut back another major holding, Bank of America (NYSE:BAC).
It also boosted its bet on home builders, revealing a new stake in DR Horton (NYSE:DHI) and significantly larger stake in Lennar (NYSE:LEN).
Crude slips ahead of Alaska meet
Oil prices fell Friday, with traders cautious on how an upcoming meeting between U.S. and Russian leaders in Alaska will affect global supply.
At 05:45 ET, Brent futures slipped 1.2% to $66.06 a barrel, and U.S. West Texas Intermediate crude futures fell 1.3% to $63.10 a barrel.
Both contracts jumped nearly 2% on Thursday.
All eyes are on Friday’s meeting of Trump and Russian leader Vladimir Putin where a ceasefire in the Ukraine war is at the top of the agenda. A continued conflict between Russia and Ukraine supports oil markets by limiting the supply of Russian oil.
Source :
https://www.investing.com/news/stock-market-news/wall-st-futures-mixed-after-hot-ppi-tempers-fed-rate-cut-bets-4194391
