The S&P 500 and the Dow rose on Tuesday following softer-than-expected U.S. retail sales numbers, with focus on commentary from a slew of Federal Reserve officials later in the day.
Data showed U.S. retail sales rose 0.1% in May, versus the 0.3% increase expected by economists polled by Reuters, as lower gasoline prices weighed on receipts at service stations.
Markets slightly increased bets on two interest rate cuts from the Fed this year following the data, according to LSEG’s FedWatch.
“The weaker-than-expected data’s telling me that consumers are still having a difficult time and that the economy is still moving forward, but at a slower pace,” Robert Pavlik, senior portfolio manager at Dakota Wealth Management, said.
Wall Street retreats with data, Fed comments in focus
“The Fed has to start thinking about cutting interest rates, perhaps sooner than the end of the year.”
A separate report showed May industrial production and manufacturing output both rose 0.9%, beating expectations.
Chip stocks continued their recent rally, boosting the Philadelphia SE Semiconductor index to a record high.
Qualcomm, U.S.-listed shares of Taiwan Semiconductor Manufacturing Co, Arm Holdings and Micron were up between 1.3% and 5%.
The Nasdaq was flat, with losses in Alphabet, Amazon and Meta Platforms offset by gains in chip stocks.
Tech shares lifted the benchmark S&P 500 to its fifth record high close in six sessions on Monday, and the Nasdaq to its sixth consecutive record close.
Trading volumes are expected to be light, with markets shut on Wednesday for the Juneteenth holiday.
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