U.S. stocks were trading slightly higher on Tuesday ahead of the release of key retail sales data, a major driver of the U.S. economy.
The major indices closed Monday’s trading day higher, with the Dow Jones Industrial Average up just under 190 points, or 0.5%, the S&P 500 up 0.8% and the Nasdaq Composite rising 0.9%, the latter two closing the day at record highs.
Retail sales
Consumer discretionary spending is seen as an important indicator related to the U.S. economy and, consequently, the timing of when the Federal Reserve may cut interest rates.
Economists expect retail sales to increase by 0.3% month-over-month. This would be an acceleration from flat growth in April when spending on many goods was dampened by high gasoline prices.
Investors will focus on speeches from Fed officials this week, most notably Boston Fed President Susan Collins and Richmond Fed President Tom Barkin.
On Monday, Philadelphia Fed President Patrick Harker backed a 25 basis point cut in 2024, while echoing a median rate estimate for the rest of the year released by policymakers the previous week.
Tesla fights for CEO Musk’s pay package
Tesla (TSLA) remains in the spotlight as the electric car maker begins its legal battle for recognition of CEO Elon Musk’s nearly $56 billion pay package, which shareholders voted in favor of after a judge had struck it down earlier in the year.
Elsewhere, stocks of Chegg (CHGG) soared by more than 20% before the market opened after the education technology group reported plans to cut its global workforce by 23% as part of its deeper restructuring.
Stocks of Lennar (LEN) lost nearly 3% before the markets opened as the homebuilder estimated that its third-quarter housing deliveries will be below estimates, a sign that demand for new homes is expected to remain sluggish as mortgage rates remain at two-decade highs.
GameStop (GME) stocks lost about 1.5% before the market opened, following last session’s steep losses, after CEO Ryan Cohen announced to investors that the video game retailer plans to operate a smaller network of stores.
Crude oil falls on demand fears
Oil prices edged lower on Tuesday, shedding some of the previous session’s gains, as global demand expectations remain uncertain amid abundant supply.
Data released earlier this week showed that China, the world’s largest importer of crude oil, was struggling to produce a solid economic recovery, while the U.S. economy felt the weight of a long stay at high interest rates.
