Investing.com - Here are the top five things you need to know in financial markets on Thursday, August 30:
1. Trade Headlines Remain in Focus
Markets will be watching for more trade-related headlines as optimism that a NAFTA deal could be struck by Friday's deadline gave way to worries over a prolonged Sino-U.S. trade dispute.
The leaders of the United States and Canada expressed optimism that they could reach new NAFTA deal by a Friday deadline as negotiators prepared to talk through the night, although Canada warned that a number of tricky issues remained.
Under pressure, Canada rejoined the talks to modernize the 24-year-old North American Free Trade Agreement on Wednesday after Mexico and the U.S. announced a bilateral deal on Monday.
U.S. President Donald Trump has set a Friday deadline for the three countries to reach an in-principle agreement.
Investors will also be keeping abreast of the ongoing trade spat between the U.S. and China to see if any more news materializes.
U.S. tariffs on another $200 billion of Chinese goods are expected to take effect later next month.
Investors fear an escalating trade war between the world's two biggest economies could hit global growth and damage sentiment.
2. U.S. Stocks Pause for Breath After Record Four-Day Run
U.S. stock index futures ticked lower, suggesting that equities were set to retreat after four consecutive record-setting sessions on Wall Street.
The blue-chip Dow futures were down 90 points, or around 0.3%, at 5:30AM ET, the S&P 500 futures declined 7 points, or around 0.2%, while the tech-heavy Nasdaq 100 futures indicated a drop of 17 points, or roughly 0.2%.
Wall Street ended higher on Wednesday, with both the S&P 500 and the Nasdaq closing at records for the fourth consecutive session.
The day’s trading could be light, which is typical for late August, as it serves as the unofficial last week of summer ahead of the Labor Day holiday in the U.S.
Elsewhere, in Europe, nearly all of the region's major bourses were lower, with most sectors in the red.
Earlier, in Asia, markets in the region handed back earlier gains to close broadly lower, with Chinese markets leading losses.
3. Last Batch of Retail Earnings
On the earnings side, the retail sector will remain in focus as the quarterly reporting season winds down.
Earnings before the opening bell are expected from discount retailers Dollar Tree (NASDAQ:DLTR), and Dollar General (NYSE:DG), as well as Abercrombie & Fitch (NYSE:ANF), Burlington Stores (NYSE:BURL), Kroger (NYSE:KR), Signet Jewelers (NYSE:SIG), Ciena (NYSE:CIEN), and Campbell Soup (NYSE:CPB).
After the close, Lululemon (NASDAQ:LULU), Ulta Beauty (NASDAQ:ULTA), and American Outdoor Brands (NASDAQ:AOBC) are on deck.
4. Dollar Rises for First Time in Five Days
Away from equities, the dollar rose for the first time in five days, as investors continue to monitor global trade talks, though thin month-end markets checked gains.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was marked modestly higher at 94.65, but still not far from Tuesday’s one-month lows of 94.34.
Elsewhere, the British pound held around the 1.30 level against the dollar after European Union negotiator Michel Barnier said the bloc was prepared to offer Britain a partnership after Brexit.
The foreign exchange market also kept a wary eye on the Turkish lira, which fell roughly 3% to a two-week low amid lingering concerns over deteriorating relations between the U.S. and Ankara.
Other struggling emerging market currencies also drew attention, with Argentina's peso and India's rupee slumping to record lows versus the dollar.
Emerging market currencies have been hard hit by concerns that higher U.S. interest rates will pressure countries that have borrowed heavily in dollars in recent years.
5. U.S. PCE Inflation Data
Investors will get more data on the state of the U.S. consumer with personal income and spending data for July set for release at 8:30AM ET.
Economists expect personal income to rise 0.3% over the prior month, while spending is forecast to gain 0.4%, according to estimates.
The Fed’s preferred inflation metric, core personal consumption expenditures (PCE), is also set for release in the morning.
The consensus forecast is that the report will show that the core PCE price index inched up 0.2% last month. On an annualized basis, core PCE prices are expected to rise 2%.
Weekly initial jobless claims numbers come at the same time, with economists predicting a small rise from the previous week.