Dow and S&P 500 on the brink of fresh all-time highs ahead of retail-sales, other data

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U.S. stock indexes on Friday looked set to extend an uptrend playing out on Wall Street that has put the Dow and S&P 500 on the cusp of carving out fresh all-time highs as the backdrop of receding Sino-American trade tensions and easy-money central banks supports risk taking.

How are the major benchmarks performing?

Futures for the Dow Jones Industrial Average YMU19, +0.38% were up 117 points, or 0.4%, at 27,301, those for the S&P 500 index ESU19, +0.33% were up 9.05 points, or 0.3%, at 3,022,75, while Nasdaq-100 futures NQU19, +0.40% were 23.50 points higher at 7,966, a rise of 0.3%.

On Thursday, the Dow DJIA, +0.17% rose 45.41 points, or 0.2%, to close at 27,182.45, notching a seventh advance and the longest series of gains for the blue-chip index since an eight-session rally ended May 14, 2018, according to FactSet data. Meanwhile, the S&P 500 index SPX, +0.29% added 8.64 points, or 0.3%, to finish at 3,009.57, while the Nasdaq Composite Index COMP, +0.30% advanced 24.79 points, or 0.3%, to end at 8,194.47.

Thursday’s action left the Dow 0.6% from its record at 27,359.16 hit on July 15, while the S&P 500 was 0.5% from its all-time high at 3,025.86 set on July 26. The Nasdaq ended the day 1.6% from its all-time closing high. The Nasdaq is 1.6% from its record at 8,330.21 also hit on July 26.

What’s driving the market?

A report on retail sales due at 8:30 a.m. Eastern Time could help to cement — or deflate — a cautious optimism that has overtaken Wall Street in recent days. All three main stock-market benchmarks are within a hair’s breadth of carving out new records and the Dow is set for its eighth consecutive gain, a feat it hasn’t accomplished since May of 2018.

Softening trade tensions between the U.S. and China, with the hope of formal negotiations to restart early next month, and easy-money policies being undertaken by global central banks have all helped to momentarily ease many investors’s fear that a recession will grip the U.S. economy in the near term. The European Central Bank on Thursday cut its deposit rate from -0.4% to -0.5%, while announcing it would restart open-ended purchasing of long-term government bonds at a pace of €20 billion a month in an effort to further reduce long-term interest rates.

The Federal Reserve will deliver its domestic policy statement, with further rate cuts widely expected, on Sept. 18.

Thus far, stability, if not outright strength, in the economy has been part of the recipe for rising market prices and bond yields, reflecting a pullback in anxieties. Indeed, gains for equities have come as the 2-year Treasury note TMUBMUSD02Y, +1.48% is on track for its sharpest weekly yield gain, which moves in the opposite direction to prices, since 2011 and the 10-year Treasury TMUBMUSD10Y, +1.38% and the 30-year’s TMUBMUSD30Y, +0.96%  sharpest weekly climb in rates since 2016, according to Dow Jones Market Data.

Economists forecast retail sales grew 0.2% in August, after a gain of up 0.7% in July. That data along with gauges of import prices and export prices due at the same time and a report on consumer sentiment for September, along with business inventories, due at 10 a.m., are likely to provide more color on the state of U.S. expansion in its record-setting 11th year.

However, there are some doubts that retail sales will help to add to the market’s recent ascent.

“Low unemployment, decent wage growth and persistently high consumer confidence have been the driving forces behind robust retail sales in the last few months. However, the sharp fall in consumer confidence for August (as measured by the University of Michigan) to its lowest level since October 2016, amid escalating trade tensions, could start to weigh on retail sales,” wrote strategists at UniCredit in a Friday research note.

How are other markets trading?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +1.38%  extended its weekly gain on Friday, adding 1.5 basis point to 1.80% from 1.789% late Thursday.

In commodity markets, the price of crude oil CLV19, +0.13%  rose 0.3% to $55.27 a barrel on the New York Mercantile Exchange, while gold prices GCZ19, +0.33%  picked up 0.3% to $1,512.30 an ounce. The U.S. dollar DXY, -0.28%, meanwhile, slumped 0.3% lower relative to a basket of leading rivals, extending its weekly of 0.4%.

In Asia overnight Thursday, Hong Kong’s Hang Seng Index HSI, +0.98% gained 1% and Japan’s Nikkei 225 NIK, +1.05%  rose 1.1%. European shares edged mostly higher Friday, with the Stoxx Europe 600 SXXP, +0.15%  headed 0.3% gain.