US open: Markets rangebound early as economic data comes in mixed
US stocks were rangebound on Tuesday morning as risk appetite was capped by markets already trading at record highs, while economic data came in mixed.
Leading indicators for May showed that retail sales barely rose, while industrial production growth picked up to a 10-month high.
By 0950 EDT, the Dow was just 0.09% higher, while the S&P 500 gained 0.14% and the Nasdaq slipped 0.02%. Both the S&P 500 and Nasdaq put in decent gains the previous session to reach new all-time closing highs of 5,473.23 and 17,857.02 respectively.
"Monday brought fresh record closing highs for both the S&P and NASDAQ. The Dow continues to move sideways while the Russell 2000 is struggling. Could these be indications that not everything is as bullish as other markets would suggest? Maybe. Yet sentiment certainly feels positive, and there’s no shortage of buyers out there apparently happy to add to their long side exposure," said David Morrison, senior market analyst at Trade Nation.
In economic data, US retail sales rose by just 0.1% in May, missing the 0.2% growth expected, while April's change was revised to -0.2% from 0%. However, according to Michael Pearce, deputy US economist at Oxford Economics, risks to future consumer spending growth is still tilted towards the upside.
"Consumer spending is slowing because real incomes growth is moderating and because some consumers are becoming credit constrained amid elevated interest rates and rising credit card utilisation," Pearce said. "However, with unemployment unlikely to rise much and the state of households' balance sheets still looking strong in aggregate, we expect consumer spending growth will remain close to its current pace in the second half of the year."
Meanwhile, industrial production increased by 0.9% last month, following no change in April and beating the 0.3% reading expected.
The rest of Tuesday's session will be quiet from a data perspective, though speeches from six members of the Federal Reserve will garner a lot of attention, including those from Dallas Fed president Lorie Logan and the Chicago Fed's Austan Goolsbee. Markets will be closed on Wednesday for the Juneteenth US national holiday.
Market movers
Chip stocks were continuing to outperform, with Nvidia, Broadcom, Micron Technology and Qualcomm all putting in gains early on.
Banks were also in demand, with Bank of America, Wells Fargo, Citigroup and JPMorgan Chase all on the rise.
Apple was inching lower after the news that the tech giant is ending its buy now, pay later service which it launched in March 2023.
Adobe rebounded following falls on Monday after the software group was accused by Justice Department on Monday of making it too difficult for customers to cancel their subscriptions.