US pre-open: Futures point to small gains following retail earnings

Wall Street futures were pointing to small gains ahead of the bell on Tuesday following some stronger-than-expected earnings from retail giants Walmart and Home Depot.

The Dow closed 86.11 points lower on Monday, while the S&P 500 closed just a few points shy of the record close the index recorded back on 19 February.

Tuesday's main focus will be earnings from some of the US' biggest retailers, with Walmart topping earnings and revenue estimates amid a surge in same-store and e-commerce sales, while Home Depot shares ticked up in pre-market trading as sales surged 23% as Americans turned to do-it-yourself projects amid Covid-19 lockdowns.

Investors were also digesting a report from NBC that said Republicans in the Senate will look to introduce a narrow Covid-19 relief plan that includes $10.0bn for the US Postal Service.

Tensions between Beijing and Washington also had investors on the edge of their seats, with the Trump administration announcing that it would further tighten restrictions on Chinese tech giant Huawei as part of an effort to crackdown on the firm's access to commercially available computer chips.

Oanda's Craig Erlam said: "Stock markets appear to have remained in something of a holding pattern early this week, as we navigate through a relatively quiet period in the markets.

"This may just be the calm before the storm, with the final months of the year being potentially huge. The next few months could potentially deliver a multi-trillion relief deal, a fierce and highly unusual Presidential election and a Covid vaccine. It could be massive for markets."

Also in corporate news, Advance Auto Parts shares were higher in pre-market trading after reporting a big profit beat as sales rise above forecasts, while Tesla shares jumped before the bell ahead of its expected five-for-one split later in the month.

On the macro front, building permits and housing starts data for July will be out at 1330 BST.