US pre-open: Futures rise ahead of retail sales, Arm IPO

Stock futures were rising on Wall Street on Thursday as investors awaited a key retail sales report and a hotly anticipated initial public offering from Arm.

In pre-market trade, the Dow and S&P 500 were trading 0.3% higher while the Nasdaq was rising 0.4%.

Bond yields retreated on Wednesday after consumer price inflation data cemented hopes that the Federal Reserve will hold rates steady at its policy meeting next week. Core inflation fell to an annual rate of 4.3% in August, down from 4.7% in July.

The yield on a 10-year Treasury note was up just 0.3 basis points at 4.262% on Thursday, after surpassing the 4.3% level before the data release.

"What’s driving markets is the game everyone loves; guess what the Fed will do next. On that front, nothing’s likely to change at the next Fed meeting with markets all but certain another pause is on the cards," said Matt Britzman, equity analyst at Hargreaves Lansdown.

"Where it gets interesting is looking to November and the potential for one further hike before arriving at what many hope is the end of this rate hiking cycle."

On Thursday's agenda will be a crucial monetary policy meeting at the European Central Bank, where a 25-basis-point rate hike is expected. A decision is expected to be announced at 0830 ET.

In the US, two economic data releases will be closely watched: due out at 0830 ET, US retail sales growth is expected to have slowed to just 0.2% in August after a 0.7% increase in July; while at 1000 ET jobless claims are forecast to have climbed to 225,000 last week, up from 216,000 the week before.

In company news, Arm is expected to set its share price at $51 when it floats on the Nadsaq, valuing the British chip designer at $52bn. Owner SoftBank is thought to raise around $5bn from the IPO, according to reports.

"The market valuation is still a long way short of the $64 billion implied by internal dealmaking at current owner Softbank last month, but if the bankers advising the company called it right then the chip designer could be approaching those levels sooner rather than later," said AJ Bell investment director Russ Mould.