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June retail sales stronger than expected

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BofA's Q2 profit falls on shrinking interest income

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UnitedHealth ( UNH ) falls on higher medical costs

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Match up on report activist investor Starboard built stake

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Futures up: Dow 0.34%, S&P 500 0.25%, Nasdaq 0.33%

(Updated at 8:44 a.m. ET/1244 GMT)

By Lisa Pauline Mattackal and Ankika Biswas

July 16 (Reuters) -

Wall Street was set to open higher on Tuesday as

unexpectedly strong

retail sales

data signaled continued resilience in the U.S. economy,

while doing little to dampen expectations of interest-rate cuts

by the Federal Reserve this year.

Corporate earnings were also in focus. Bank of America's ( BAC )

second-quarter profit

fell after its interest income shrank and it set aside more

money to cover potential credit losses. However, shares of the

second-largest U.S. bank rose 1.7% in premarket trading

following an upbeat net interest-income forecast.

Morgan Stanley ( MS ) fell 2.6% after posting wealth

management revenue below estimates, while Charles Schwab ( SCHW )

dropped 5% after results.

A Commerce Department report showed retail sales were

unchanged in June, when they were expected to fall 0.3%, while

retail sales minus automobiles jumped 0.4%, versus forecasts of

a flat reading.

However, traders stuck with strong bets on a

25-basis-point rate reduction by September's central bank

meeting, pricing in a nearly 88% chance, according to the CME's

FedWatch.

"Investors, at first, were likely disappointed because

it might not assist in helping the Fed make a decision about

cutting rates. But at the same time, it's offering comfort that

the U.S. economy is not headed toward recession anytime soon,"

said Sam Stovall, chief investment strategist, CFRA Research.

"The momentum trade will likely continue, especially

with a broadening into the smaller cap companies within the U.S.

investor marketplace."

Futures tracking the Russell 2000 jumped 1.2%

after the small-cap index closed at its highest level

since January 2022 as investors continue to move away from

heavily weighted tech stocks, which have driven much of Wall

Street's rally this year.

The blue-chip Dow closed at a record high in Monday's

session on strong bets of a Federal Reserve interest-rate cut in

September and a second term for presidential candidate Donald

Trump following an assassination attempt.

Markets took it as a dovish signal when Fed Chairman Jerome

Powell said on Monday that the latest economic data "add(s)

somewhat to confidence" that inflation was returning to the

central bank's 2% target.

Investors perceived a potential second presidential term for

Trump as a positive sign for equities after he survived the

shooting at his campaign rally on Saturday. However, there were

signs of uncertainty, with Wall Street's "fear gauge"

briefly touching its highest level in three weeks.

Trump-linked stocks retreated after Monday's rally, with

Trump Media & Technology Group ( DJT ) and software firm

Phunware ( PHUN ) losing 9% and 3.8%.

At 8:44 a.m. ET, Dow e-minis were up 139 points, or

0.34%, S&P 500 e-minis were up 14.25 points, or 0.25%,

and Nasdaq 100 e-minis were up 68 points, or 0.33%.

UnitedHealth Group ( UNH ) rose 2.5% in choppy trading after

reporting second-quarter profit above expectations, despite

forecasting a bigger hit to annual profit from a cyberattack in

February.

Tinder owner Match jumped 6.2% after a report

activist investor Starboard has a stake of more than 6.5% in the

company and was pushing for a possible sale if a turnaround

wasn't successful.