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Stocks push to record highs as retail sales miss cools rate bets
July U.S. retail sales fell for the first time in nine months, helped by a temporary oil price drop, while investors also weighed upcoming Fed minutes and industrial production data.
U.S. stock indexes moved toward record highs as a softer read on retail sales helped cool expectations for a September Federal Reserve rate hike, Reuters said in its Morning Bid market briefing.
The decline in July sales followed the first drop in U.S. retail sales in nine months reported last Friday, though the weakness was partly exaggerated by a retreat in oil prices that has since reversed, and Amazon shifted its Prime Day discount event into June this year. Reuters noted the retail signal also aligns with a drop in consumer confidence in the University of Michigan survey and subdued inflation reports from the prior week, together tempering near-term rate expectations.
Looking ahead, investors were set to watch Home Depot, Target, and Walmart for second-quarter results later in the week, along with scheduled macro updates including minutes from July's split Fed policy meeting on Wednesday and an industrial production figure on Tuesday.
Elsewhere, Reuters pointed to Japan's 10-year government borrowing rates reaching a three-decade high despite second-quarter GDP coming in below forecasts, and it said China's industrial output and retail sales slowed into the second half amid extreme weather disruptions and weak domestic demand. The briefing added that oil prices have been reheating in recent weeks amid an Iran conflict standoff, a factor that could influence the outlook before the Fed meets next month.