Retailers' Earnings to Test Wall Street as Consumer Spending Fears Grow
Wall Street is bracing for a big week as major retailers Walmart and Target report their second-quarter earnings, one week after stocks reached an all-time high.
The unexpected dip in retail spending last month has raised concerns about the state of the American consumer, which drives the US economy. According to Commerce Department data, Americans pulled back on retail spending in July by the largest amount in over a year.
Walmart and Target are expected to provide insight into their sales performance, with Target's new CEO Michael Fiddelke at the helm. Home improvement companies Home Depot and Lowe's will also report quarterly earnings this week.
The sector is struggling with high inflation and customers focused on prices, making it a challenging time for retailers. The weak jobs and retail data has reduced the likelihood of an interest rate hike from the Federal Reserve, which could have positive implications for markets but may also indicate slowing growth at a time when inflation is elevated.