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* Futures: Dow dips 0.02%, S&P flat, Nasdaq up 0.05%
By Medha Singh
Aug 20 (Reuters) - U.S. stock index futures treaded water on Tuesday as investors paused after a three-day run that was driven by hopes that major economies would act to counter a global economic downturn.
After a stormy start to the month on worsening U.S.-China trade tensions, the indexes have rebounded sharply, with the S&P 500 and the Nasdaq erasing last week’s losses on signs Germany and China are considering stimulus.
A report late on Monday said White House officials are discussing the possibility of a temporary payroll tax cut in an effort to boost the economy.
A clutch of retail earnings this week will test the health of U.S. consumer demand. Home Depot Inc beat quarterly profit estimates but cut its full-year sales forecast, citing potential impact of the trade war on consumer spending. Target , Lowe’s and Nordstrom report later this week.
All eyes this week will be on Wednesday’s release of minutes from the Federal Reserve’s July policy meeting and Chair Jerome Powell’s speech on Friday at the Jackson Hole central bankers’ conference.
Powell’s remarks will be closely monitored for hints if more policy easing is in store, especially as the U.S.-China trade war seems far from resolved and growing fears of recession, signaled by the inversion of the U.S. yield curve last week.
Even as Powell classified last month’s interest rate cut as a “mid-cycle” policy adjustment, traders are currently fully pricing in another rate cut in September.
At 6:51 a.m. ET, Dow e-minis were down 6 points, or 0.02%. S&P 500 e-minis were down 0.25 points, or 0.01% and Nasdaq 100 e-minis were up 4.25 points, or 0.05%.
The benchmark S&P 500 fell as much as about 7% from its July record high last week, but is now down only about 3% from that level.
Shares of HP Inc slipped 2% after Citigroup downgraded the PC maker to “neutral” from “buy”.
U.S.-listed shares of Baidu Inc jumped 9.9% after the Chinese internet search giant reported better-than-expected quarterly earnings. (Reporting by Medha Singh in Bengaluru Editing by Saumyadeb Chakrabarty)