Wall Street pulls back after weak US data, Home Depot’s gloomy forecast

May 16 (Reuters) – U.S. stocks fall on Tuesday after Home Depot’s disappointing full-year outlook and April retail sales data suggest consumers are feeling the effects of high inflation and tight monetary policy. Markets are also awaiting the outcome of the key debt ceiling talks in Washington.

By 17:09 Moscow time, the Dow Jones index was down 0.55% to 33,164.03 points, the S&P 500 index was down 0.33% to 4,122.58 points and the Nasdaq index was down 0.14% to 12,348.03 points.

US retail sales rose 0.4% in April compared to the previous month. Analysts expected an increase of 0.8%.

“Retail sales figures have been positive for several months but are still weak,” said Jamie Cox of Harris Financial Group.

“It basically confirms what we saw from Home Depot this morning. You may be seeing the end of the retail decline, but from then on things won’t go so smoothly.”

Home Depot shares fell 1.5% and put Dow Jones under pressure after the company lowered its full-year sales forecast.

Rival Lowe’s lost 1.9% and retail giant Walmart Inc lost 0.5%.

Recent data indicate a slowdown in the growth of the US economy, which is starting to feel the pressure from the restrictive monetary policy, as well as increased expectations for a break in the monetary policy tightening cycle.

At the same time, Cleveland Federal Reserve Bank Governor Loretta Mester said on Tuesday that she believes the US central bank has not yet reached the point where it can keep interest rates stable for some time.

Microsoft Corp shares rose 0.7% for a second straight day after the EU’s antitrust authority approved the $69 billion acquisition of Activision Blizzard by the tech giant on Monday.

Capital One Financial Corp jumped 4% – the most among the components of the S&P 500 – after Berkshire Hathaway Inc on Monday said it had started investing in the consumer lender.

Berkshire also increased its stake in HP Inc, up 0.6%.

The original message in English is available at the code: (Shreishi Sanyal, Shristi Achar A and Medha Singh in Bangalore)