New York Stock Market Mixed Amid January Retail Sales Decline... Dow Up 0.3%

January Retail Sales Decrease by 0.8% Compared to Previous Month

The three major indices of the U.S. New York stock market showed mixed trends in the early trading session on the 15th (local time). With the U.S. retail sales data released before the market open showing a much larger decline than Wall Street expectations, the market appeared cautious and was observing rather than seeking a clear direction.

As of 9:43 a.m. at the New York Stock Exchange (NYSE) on the day, the Dow Jones Industrial Average was trading at 38,539.72, up 0.3% from the previous trading day. The S&P 500, focused on large-cap stocks, rose 0.19% to 5,010.07, while the tech-heavy Nasdaq index was down 0.03% at 15,854.97.

By individual stocks, Shake Shack, which posted strong earnings in the fourth quarter of last year, was up more than 20%. Cisco fell nearly 3% after announcing plans to cut 5% of its workforce and lowering its annual earnings outlook. Nvidia, which rose 2.46% the previous day to surpass Alphabet, Google's parent company, and rank third in market capitalization, was down about 1.5%.

Investors are closely watching the retail sales data, new unemployment claims, and Treasury yield movements released on the day to gauge the Federal Reserve's future interest rate path.

According to the U.S. Department of Commerce, January retail sales fell 0.8% month-over-month to $700.3 billion. This was the largest decline in about a year and a steeper drop than the Wall Street Journal (WSJ) forecast of -0.3%. The retail sales increase for December was revised down from 0.6% to 0.4%. Retail sales are considered a key indicator supporting about two-thirds of the U.S. real economy and are used to assess overall economic trends. The decline in retail sales last month suggests the U.S. economy is cooling faster than expected, sparking some renewed hopes in the market that the possibility of interest rate cuts in the second quarter has not yet faded. According to the Chicago Mercantile Exchange (CME) FedWatch tool, federal funds futures on the day priced in more than a 36% chance that the Fed will cut rates by at least 0.25 percentage points in May, slightly up from 35% the previous day.

New unemployment claims in the U.S. decreased compared to the previous week, indicating the labor market remains solid. According to the U.S. Department of Labor, new unemployment claims for the week of February 4?10 totaled 212,000, down 8,000 from the prior week and below the expert forecast of 219,000. Continuing claims, which count those filing for unemployment benefits for at least two weeks, rose by 30,000 to 1.895 million for the week of January 28 to February 3, indicating fewer existing unemployed individuals found new jobs.

Chris Larkin, Managing Director at Morgan Stanley E-Trade, analyzed, "Today's weak retail sales and moderate unemployment claims could both help ease short-term market anxiety." However, he added, "The higher the market rally goes, the more vulnerable it may be to declines when individual economic data do not align with rate cut discussions."

Comments from Federal Reserve officials continue on the day. Market attention is focused on remarks by Fed Governor Christopher Waller and Raphael Bostic, President of the Federal Reserve Bank of Atlanta.

Treasury yields are falling amid the slowdown in retail sales. The U.S. 10-year Treasury yield, a global bond yield benchmark, dropped 6 basis points (1 bp = 0.01 percentage points) from the previous trading day to 4.2%, while the 2-year yield, sensitive to monetary policy, fell 4 basis points to around 4.53%.

International oil prices are weak following news of an increase in U.S. crude oil inventories. West Texas Intermediate (WTI) crude fell 0.8% to $76.01 per barrel, and Brent crude declined 0.75% to $80.99 per barrel.