The S&P 500 may have hit a new all-time high this month, but that doesn’t necessarily mean consumers are feeling good about the economy. While consumer sentiment has rebounded from its historic lows, July retail sales data surprised to the downside at $763.6 billion, down 0.6% from the previous month. One data point doesn’t create a trend (and the number was still up 5% from July 2025), but it was the first month-over-month retail sales decline since October 2025, and investors have been watching retail sector earnings closely over the last week.
Walmart Inc. (NASDAQ: WMT) and Home Depot Inc. (NYSE: HD) were two bellwethers that reported this week, and both beat estimates and posted comp sales growth. But the market reaction couldn’t have been more different, and a deeper dive into the numbers shows that the dreaded K-shaped economy is still very much with us.
