(Updated at 10:51 a.m. ET/1451 GMT)
A gauge of global stocks advanced for a second straight session on Tuesday and U.S. Treasury yields fell after a softer-than-expected report on consumer spending, while investors digested comments from Federal Reserve officials on interest rates.
The U.S. Commerce Department said
retail sales rose
0.1% last month after a downwardly revised 0.2% drop in April and below expectations of economists polled by Reuters for a gain of 0.3%, indicating economic activity was slowing as higher interest rates affect consumer spending patterns.
"Any increase is bound to be a dead-cat bounce, April’s number was revised lower and it was a weak advance from that lower base," said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.
"Consumers are feeling the pinch of high prices and high financing costs."
Market expectations the U.S. Federal Reserve could cut rates at its September meeting crept higher, pricing in a 67% chance for a cut of at least 25 basis points, up from 61.5% in the prior session.
Other data showed U.S. business inventories rebounded in April, increasing by 0.3% after slipping 0.1% in March.
The Dow Jones Industrial Average .DJI fell 17.74 points, or 0.05%, to 38,759.63, the S&P 500 .SPX gained 3.45 points, or 0.06%, to 5,476.60 and the Nasdaq Composite .IXIC lost 17.30 points, or 0.10%, to 17,839.39.
U.S. markets are closed on Wednesday for the Juneteenth holiday.
MSCI's gauge of stocks across the globe .MIWD00000PUS rose 2.57 points, or 0.32%, to 802.94 after climbing to within a point of a new record.
New York Federal Reserve President
John Williams said
interest rates will come down gradually over time, but declined to say when the U.S. central bank can kick off its monetary policy easing, while Richmond Fed President
Thomas Barkin said
he needs to parse several more months of data before he can consider supporting a cut.
Multiple Fed officials are also on tap to speak on Tuesday, including Governor Adriana Kugler.
European shares also climbed, as the focus shifts to economic data and comments from central bank officials in the wake of the sharp drop last week after French President Emmanuel Macron called a snap election.
U.S. Treasury yields
moved lower
following the retail sales data. Later in the session, Treasury will auction $13 billion in 20-year bonds US20YT=RR .
The yield on benchmark U.S. 10-year notes US10YT=RR fell 2.7 basis points to 4.252%.
The dollar pared gains on the heels of the data and was only slighter higher on the session, as the dollar index =USD , which measures the greenback against a basket of currencies including the yen and the euro, gained 0.04% at 105.31. The euro EUR= was last up 0.03% at $1.0737.
Against the Japanese yen JPY= , the dollar strengthened 0.16% at 157.98 and sterling GBP= weakened 0.09% at $1.2692.
Earlier in the day, the Reserve Bank of Australia kept rates at a 12-year high of 4.35% on Tuesday, as expected, but warned there were still reasons to guard against inflation risks.
The Australian dollar AUD= strengthened 0.47% versus the greenback at $0.6643.
Central banks in Norway, Britain and Switzerland are also scheduled to meet this week, where only the Swiss National Bank is expected to announce a rate cut.
U.S. crude CLc1 gained 1.29% to $81.37 a barrel and Brent LCOc1 rose to $85.04 per barrel, up 0.94% on the day after the comments from Williams and expectations for a drawdown in U.S. inventories.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates YTD http://tmsnrt.rs/2egbfVhMonthly change in US retail sales https://reut.rs/4ekuJSK
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> ((To read Reuters Markets and Finance news, click onhttps://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on:
0#.INDEXA ))
