U.S. Stocks Turn Red After Weak Retail Sales, Home Depot Report
After the recent retail sales data (April) and Home Depot report, the US stocks turned red and were trading lower. The recent report from Home Depot was weaker than the market expectations.
These negative events caused the S&P 500 & DJIA to be down by 0.3% and 0.7%, respectively. On the other hand, the NASDAQ Composite index was up by 0.1%.
As per the report from Commerce Department, a 0.4% increase in retail sales was seen during April. Although the gain was good for the economy, but it was still not enough and hinted towards the effects of inflation on consumers.
Housing Market Index Reached 50
The housing market index that's issued by the National Association of Home Builders was last seen near 50. Just a month ago (April), it was seen near 45.
After the news, the Home Depot (HD) shares lost 1.3% of its value, but we believe that the housing market index had nothing to do with that decline. In reality, the lower sales forecast was the reason behind the drop in Home Depot shares.
Another factor that's weighing heavily on the US stocks is the debt ceiling. The deadline for the US default is fast approaching, and the political parties still haven't agreed on a plan.
Looking ahead, the next Fed meeting is scheduled in June, where the members will look at the recent condition of the economy. For now, the data is pointing towards a cooldown in the US economy and inflation that's still higher than the 2% target.
In addition, the market participants are anticipating a pause in the rate hikes starting from the June meeting. As for the rate cuts, the forecast is set for later this year.
In other news, the shares of Tesla Inc gained a 1% upside after reports that George Soros's fund has no stake left in the company.