US Stocks Fall As Investors Parse Retail Earnings, Await Powell
Retail earnings reports expected this week will give investors a clearer picture of US consumer spending.
US equities fell at the open Tuesday as earnings from Home Depot Inc. kicked off a string of key retail reports and as investors awaited a Federal Reserve symposium this week to set expectations for the path of interest rates.
The S&P 500 Index opened 0.1% lower, led by the energy and communication services sectors. Palo Alto Networks Inc. was the top-performing stock in the index after releasing a stronger-than-expected annual sales forecast.
The tech-heavy Nasdaq 100 Index slipped 0.2% while the Dow Jones Industrial Average rose 0.2% and is on pace to close at a record.
Retail earnings reports expected this week will give investors a clearer picture of US consumer spending. A Home Depot sales returned to growth in the second quarter. Lowe’s Cos., Target Corp. and Walmart Inc. are all scheduled to report this week.
Meanwhile, US Treasury Secretary Scott Bessent said a recent uptick in services inflation was driven by investment services.
The comments come before an annual Fed symposium in Jackson Hole, Wyoming, where Chair Jerome Powell is scheduled to deliver a speech on Friday that investors will be studying for clues around the potential for an interest-rate cut as soon as next month.
“Friday’s Jackson Hole speech is likely an inflection point for markets as we believe Jerome Powell will signal that rate cuts are likely at the upcoming September meeting,” said Stephen Schwartz, founding partner at Pioneer Financial.
Stocks have been buoyed by a stronger-than-expected earnings season, in which firms posted an average 8.2% upside surprise on results, which Barclays said has led institutions including mutual funds to increase their equity exposure.
“Institutions take the buyer baton back from retail,” Venu Krishna, head of US equity strategy at Barclays Capital, wrote in a note. He added that US mutual fund equity exposure is back above the long-term median “for the first time in over a year.”
Still ahead this week, investors will also watch minutes from the last Federal Open Market Committee meeting, due Wednesday, as well as initial jobless claims on Thursday.
