Retail Earnings and Oil Prices Weigh on US Stock Markets

US stocks edged further away from their record highs on Monday as investors await key profit reports from major retailers this week. The S&P 500 slipped 0.4%, while the Dow Jones Industrial Average dropped 284 points, or 0.5%. The Nasdaq composite fell 0.3%.

The strong earnings growth for US companies has been a driving force behind the recent stock market surge. Profits are on track to rise around 50% for S&P 500 companies in the spring from last year, according to FactSet.

However, retailers such as Home Depot, Target, and Walmart may face challenges due to rising inflation and a slowing job market. Their customers' incomes may be under pressure after US employers unexpectedly cut more jobs last month than they added. Meanwhile, consumers are continuing to see bills rise quickly as inflation remains higher than desired.

Oil prices rose 2.4% on Monday to $90.62 per barrel of Brent crude, further solidifying the losses for stocks. The war with Iran has been a major factor in the fluctuations in oil prices over the past month, with hopes rising and falling that a deal would allow oil tankers to freely exit the Persian Gulf.