Wall St eyes higher open as Fed-pause bets remain unchanged after economic data

investing.com:

By Ankika Biswas and Shristi Achar A

(Reuters) — Wall Street's main indexes were set to open higher on Thursday as hotter-than-expected economic data did not dent hopes of a pause in rate hikes in September, while investors awaited a highly anticipated Arm Holdings' stock market debut.

Retail sales rose more than expected in August on higher gasoline prices, while initial claims for state unemployment benefits climbed to a seasonally adjusted 220,000 for the week ended Sept. 9 from 217,000 the week before.

Monthly producer prices for final demand rose 0.7% in August, against expectations of a 0.4% increase. On an annual basis, they increased 1.6% compared with estimates of a 1.2% rise.

Data on Wednesday showed the annual rise in core consumer prices, excluding volatile items like food and energy, was the smallest in nearly two years, driving the S&P 500 and Nasdaq higher in the previous session.

«Investors are largely brushing off the hotter-than-expected inflation numbers, just like the consumer price index came in hotter than expected,» said Greg Bassuk, chief executive officer at AXS Investments in New York.

«One of the reasons why investors are taking it in stride is because the data was largely driven by a jump in energy and gas… however, investors should brace for another potential rate hike this year.»

The two-year U.S. Treasury yield, which best reflects short-term interest rate expectations, briefly reclaimed the 5% mark following the data after coming under pressure as the European Central Bank delivered a 25-basis-point rate hike.

Rising oil prices could keep inflation at elevated levels, analysts said. Higher gasoline prices pushed the headline inflation to a 14-month high, while persistent growth in prices