U.S. Consumer Spending Hinges on Holiday Shopping amid Market Volatility

As U.S. stock markets face volatility, focus shifts to consumer spending with the onset of the holiday shopping season. Black Friday’s performance could indicate economic momentum, with recent data hampered by government shutdowns. Analysts are watching closely amid inflation concerns and potential Federal Reserve rate changes.

U.S. stocks are enduring a tough November as investors turn their attention to consumer spending during the holiday season, kicked off by Black Friday. The S&P 500 has dropped significantly this month, and recent favorable semiconductor earnings did little to stabilize the markets.

Black Friday and Cyber Monday will provide critical insights into consumer sentiment at a time when traditional data is scarce due to government shutdowns, underlining Wall Street's focus on this holiday period. While the S&P 500 has seen significant growth in the past three years, market fluctuations may influence spending among higher-income groups.

The National Retail Federation predicts holiday sales will surpass $1 trillion for the first time, yet economic headwinds and slowed job growth raise concerns. Meanwhile, inflation remains a challenge, with retailers like Walmart expressing cautious optimism by revising annual forecasts upward.

(With inputs from agencies.)