Wall Street Holds Gains Despite Mixed Retail Sales, Powell Flags Inflation Risks

Key Takeaways:

*U.S. Retail Sales came short, fueling dovish expectations on the Fed. 

*Jerome Powell’s Hawkish remark hinders Wall Street’s Upward momentum. 

Market Summary:

U.S. retail sales data released yesterday came in above expectations but notably softer than the previous reading, prompting a cautious market tone. While the stronger-than-expected print helped ease immediate recession concerns, the deceleration in momentum raised questions about the broader economic impact of the Trump administration’s recent sweeping tariff measures.

In response, U.S. Treasury yields declined, with the 10-year yield falling over 2% in the previous session, as markets priced in increased odds of a dovish Federal Reserve pivot and potential rate cuts in the coming months. The shift in rate expectations buoyed risk sentiment, pushing major Wall Street indices higher and keeping them near recent peaks.

However, Fed Chair Jerome Powell struck a more hawkish tone in his remarks later in the session. Powell warned that persistent supply shocks stemming from aggressive trade policies could lead to more volatile and entrenched inflation. He emphasized that the central bank remains prepared to maintain a tight monetary stance for longer if inflation rebounds, signaling a potential divergence from market rate-cut expectations.

Meanwhile, Asian equity markets continue to trade in a subdued fashion, weighed down by concerns of an overheated rally earlier in the year. While Wall Street remains elevated, signs of stalling momentum suggest that a technical pullback may be on the horizon, prompting traders to exercise caution in the near term.

Technical Analysis:

Nasdaq, H4

The Nasdaq continues to trade firmly in positive territory, having surged more than 10% in May alone. The tech-heavy index remains on a strong uptrend, with momentum accelerating amid robust risk appetite and resilient earnings sentiment.

A sustained hold above the key 21,000 psychological level would further reinforce the bullish trajectory, signaling scope for additional upside. Momentum indicators continue to support this view — the Relative Strength Index (RSI) has pushed into overbought territory, reflecting strong buying pressure, while the MACD shows extended gains, underscoring the index’s bullish momentum.

Traders are now watching for signs of consolidation or a potential technical retracement, though current price action suggests the path of least resistance remains to the upside.

Resistance levels: 22,100.00, 23,600.00

Support levels: 21,000.00, 20,100.00