Retail Sales Dip Sharply in May Amid Economic Uncertainty
Retail sales declined by 0.9% in May, exceeding the expected 0.6% drop, as consumers curtailed spending amid falling gasoline prices and heightened economic uncertainty. Core retail sales, excluding categories such as autos, gas, and building materials, rose 0.4%, indicating modest underlying strength. Weakness was concentrated in sectors such as motor vehicles, fuel, and restaurants, while gains were observed in online retail, furniture, and miscellaneous stores. Although consumer sentiment improved modestly during the month, spending patterns suggest continued caution in response to tariff concerns and broader geopolitical tensions.
Fed Holds Rates Steady as Borrowers Feel the Pinch and Savers Benefit
The Federal Reserve announced it will keep interest rates unchanged, resisting pressure from President Trump for a cut amid ongoing economic uncertainty and geopolitical tensions. Although rates remain elevated following hikes in 2022 and 2023, consumer borrowing costs—such as those for credit cards, auto loans, and mortgages—remain high, while savers continue to benefit from above-inflation yields on CDs and high-yield savings accounts. Analysts expect the Fed to hold its stance until at least September, citing concerns over inflation and the economic impact of tariffs. While high interest rates pose challenges for borrowers, especially in the auto and housing markets, they continue to provide retirees and savers with competitive returns.
Stock Market Drops – Oil Prices Rise after U.S. Strikes on Iran Escalate Middle East Conflict
U.S. stock futures fell Sunday night after President Trump ordered strikes on three Iranian nuclear sites, marking a significant escalation in the conflict involving Israel and Iran. The surprise move heightened investor concerns over a broader war in the Middle East, sending oil prices up nearly 4% to around $77 per barrel. Analysts warned that potential Iranian retaliation—such as closing the Strait of Hormuz—could drive crude prices above $100 and further destabilize markets. The S&P 500, already facing pressure from trade tensions and a weakening outlook, now contends with geopolitical risk as a new threat to economic and market stability.
