U.S. stocks pulled back from all-time highs on Friday, influenced by a weaker-than-expected retail sales report, while futures and oil prices held steady Monday. Asian markets saw gains, with Tokyo's Nikkei 225 index rising 0.3% after the Japanese government reported economic growth slightly exceeding forecasts for the April-June quarter.
In Hong Kong, the Hang Seng index climbed 1.6%, and the Shanghai Composite index increased by 0.8%. Australia's S&P/ASX 200 index experienced a slight dip of 0.4%. Markets in South Korea were closed for a holiday. Taiwan's Taiex gained 0.5%, while India's Sensex fell 0.5%.
The S&P 500 closed down 0.2% on Friday, a day after data indicated lower consumer spending at U.S. retailers last month. While such economic indicators could support the Federal Reserve in maintaining lower interest rates, they also signal a potential economic slowdown amidst persistent inflation. This combination raises concerns about stagflation, a scenario characterized by stagnant economic growth and high inflation.
This week, Wall Street will receive financial updates from major U.S. retailers, including Home Depot on Tuesday, followed by Target and Lowe's on Wednesday, and Walmart on Thursday. These reports are expected to provide a clearer picture of consumer behavior and business conditions in the current inflationary environment.
Investors and economists are also anticipating further insight into the Federal Reserve's interest rate policy with the release of minutes from the July meeting on Wednesday.
In commodities trading, Brent crude, the international oil benchmark, saw a slight increase of 0.1% to $88.62 per barrel. U.S. benchmark crude prices slipped 0.3% to $82.19 per barrel. The stability of oil supplies remains a point of focus, with geopolitical considerations, including the situation surrounding Iran and the Strait of Hormuz, contributing to market uncertainty.
The U.S. dollar weakened against the Japanese yen, falling to 159.09 yen from 159.32 yen. The euro saw a marginal rise against the dollar, trading at $1.1587, up from $1.1588.