Good Afternoon. On this day in 1935, Franklin D. Roosevelt signed the Social Security Act, building a national cushion against old age and unemployment. Consumers could use a little cushioning today: retail sales retreated in July, confidence slid in August, and inflation expectations climbed. Spending hasn’t vanished, but households are becoming more deliberate about where each dollar goes.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

🔢 Big number: 8% — that’s the share of consumers who expect their income to grow faster than inflation over the next year, down from 18% in December 2024. When the cushion feels thinner, even employed households can become tougher customers.

July’s checkout totals confirmed what households have been hinting: the appetite to spend hasn’t disappeared, but it’s getting more selective. After a spring helped by tax refunds, tournament travel, and major promotions, the monthly comparison finally ran into a tougher customer.

The news: U.S. retail and food-service sales fell 0.6% from June to a seasonally adjusted $763.6 billion, the largest monthly decline since May 2025. Sales were still 5.0% above July 2025, so this isn’t a collapse. Autos, online stores, and gas stations all declined during the month, while restaurants managed a 0.5% gain. The data aren’t adjusted for price changes, which matters when gasoline is absorbing more of a household’s budget.

What’s next: Retailers shouldn’t treat one weak month as a reason to cancel the holiday plan, but they can’t assume every recent boost will repeat. Inventory, discounts, and staffing need scenarios for a shopper who’s employed yet more value-conscious. Watch August card spending and back-to-school demand for evidence that July was a reset rather than the start of a longer retreat.

Source: U.S. Census Bureau

The spending report looked backward, while August’s first sentiment reading showed why the next few months may stay uneven. Consumers aren’t only reacting to today’s prices; they’re judging whether paychecks will keep up with tomorrow’s bills.

The news: The University of Michigan’s preliminary sentiment index fell 8% from July to 51.0, reversing two months of improvement. One-year inflation expectations rose to 4.3%, and the five-year measure climbed to 3.3%. The weakening wasn’t confined to one demographic group, though older, lower-income, and non-college respondents reported especially large declines. Only 8% of consumers now expect income growth to outpace inflation over the next year.

Bottom line: Confidence doesn’t translate perfectly into purchases, but it can change which purchase happens and how long a household waits. Businesses should prepare for customers to compare more, trade down selectively, and favor clear value over vague upgrades. The Fed will notice the higher inflation expectations too, because rate relief gets harder when consumers expect price pressure to linger.

Source: Axios

Stocks spent Friday balancing weaker household signals against stubborn inflation and another rise in oil. The result wasn’t panic; it was a modest step back from records while investors reconsidered how much help lower rates can realistically provide.

The news: The S&P 500 and Dow were down close to 0.2% late in the session, while the technology-heavy market fell roughly 0.3%, so stocks didn’t fully regain their early momentum. The 10-year Treasury yield moved toward 4.7% from about 4.6% a day earlier, and the main intermediate Treasury fund declined close to 0.3%. Brent crude climbed above $88 a barrel at one point as traders weighed fresh shipping risk around the Strait of Hormuz. That mix makes borrowing and transportation a little more expensive at the same time consumers are showing more caution.

Big picture: A mild stock decline can’t decide the economic debate, but the cross-market message is useful. Investors aren’t abandoning growth; they’re charging more for businesses that need cheap capital or perfect demand. Companies should stress-test plans against higher yields and energy costs, because consumer restraint matters more when financing and freight aren’t offering an offset.

Source: Associated Press

Applied Materials delivered records almost everywhere investors usually look, yet its shares fell close to 5.4%. That reaction wasn’t a verdict against AI infrastructure; it showed what can happen when a stock has already priced in an exceptional operating path.

The news: Fiscal third-quarter revenue rose 25% to a record $9.12 billion, while adjusted earnings climbed 41% to $3.50 a share. Adjusted free cash flow reached $2.33 billion, up 14%, and management said AI demand is lifting DRAM, advanced packaging, and leading-edge chipmaking. The company also expects another strong growth year in 2027. Investors still sold the shares after they’d more than doubled this year, a reminder that beating current estimates isn’t always enough when future expectations have moved even faster.

What’s next: Chip-equipment buyers can’t build new capacity overnight, so order visibility and manufacturing execution matter as much as one quarter’s growth. Watch whether memory and advanced-packaging demand broadens without pulling spending forward from 2027. The lesson isn’t that strong results failed; it’s that valuation leaves less room when every forecast already assumes strength.

Source: Applied Materials

Tapestry offered a useful counterpoint to the broad retail slowdown: customers haven’t stopped spending when a brand gives them enough product appeal and pricing confidence. Coach did most of the lifting, while the company paired growth with more cash returned to shareholders.

The news: Fiscal fourth-quarter revenue rose 9% to $1.9 billion, with Coach up 15%, so the company didn’t have to choose between growth and cash generation. Full-year revenue reached $8.0 billion, adjusted earnings climbed 38% to $7.05 a share, and free cash flow totaled $1.9 billion. Tapestry expects fiscal 2027 revenue of $8.4 billion to $8.5 billion and adjusted earnings of $7.80 to $7.90 a share. It also raised the dividend 16% and plans roughly $1.35 billion of share repurchases, even as tariffs remain part of the margin plan.

Bottom line: Premium demand isn’t immune to consumer caution, but distinctive products can protect a business from competing only on price. The next test is whether Coach can keep attracting younger and international customers without leaning too hard on promotions. Retailers can’t copy the logo, but they can copy the discipline: know which products deserve inventory, and give shoppers a clear reason not to wait.

Source: Tapestry

Birkenstock raised its full-year growth outlook after demand accelerated across regions and channels. The German-rooted footwear company hasn’t escaped tariffs or currency pressure, but it’s showing how full-price sales and direct customer relationships can absorb part of the strain.

The news: Fiscal third-quarter revenue increased 13% to €720 million, or 15% in constant currency, and the strength wasn’t confined to one channel. Direct-to-consumer sales grew 16% on that basis, while Asia-Pacific advanced 23%. Adjusted earnings before interest, taxes, depreciation, and amortization rose 11% to €242 million. Gross margin still fell as currency translation and U.S. tariffs each took a bite, yet management lifted constant-currency annual revenue growth guidance to 15% and expects at least €710 million of adjusted operating cash earnings.

Big picture: Global brands can’t control exchange rates or border taxes, but they can control channel mix, product scarcity, and how much demand comes through owned stores. Birkenstock’s outlook suggests customers haven’t rejected higher-end footwear, though margin pressure hasn’t vanished. Watch whether direct sales keep outgrowing wholesale without requiring heavier marketing or more discounting.

Source: Birkenstock

JD.com’s quarterly revenue declined, but its profits improved as China’s online retailer spent more carefully and narrowed losses in newer businesses. The combination isn’t explosive growth, yet it shows how efficiency can create breathing room when the top line faces a difficult comparison.

The news: Second-quarter revenue fell 2.9% to RMB346.4 billion, which management attributed primarily to last year’s high base. Operating income swung to RMB4.5 billion from a RMB0.9 billion loss, while adjusted net income rose to RMB8.9 billion. Marketing expense declined 24.8%, and losses at the food-delivery operation narrowed. Core retail operating margin edged up to 4.6%, even as the company continued investing in logistics, artificial intelligence, and European expansion.

What’s next: Cost control can’t substitute for customer growth forever, but it can buy time to improve newer services without damaging the core retailer. Watch whether service revenue and marketplaces keep outgrowing product sales, and whether lower promotional spending holds after the easy efficiency gains are taken. JD.com has shown it can protect profit; now it’ll need to prove that revenue can reaccelerate.

Source: JD.com

Two tanker attacks near the Strait of Hormuz turned a familiar geopolitical risk into fresh operational damage. No one was injured and both vessels remained under control, but shippers can’t ignore repeated threats around a route that connects Persian Gulf energy exports with the open ocean.

The news: Two tankers operated by Abu Dhabi’s state-owned energy company suffered minor damage from drone attacks Thursday evening, according to the company and a British maritime security center. The United Arab Emirates blamed Iran and called the attacks piracy; Iran hadn’t responded to the accusation. Brent crude rose Friday as markets considered the risk to shipping, insurance, and regional supply. The immediate physical damage was limited, yet another incident increases the cost of treating the route as routine.

Bottom line: Energy buyers shouldn’t assume a temporary price move captures the full risk. Insurance premiums, rerouting, crew decisions, and inventory buffers can affect delivered costs before barrels disappear from the market. Companies with fuel or freight exposure can’t predict the next incident, but they can review hedges, supplier concentration, and how much time their inventory provides.

Source: Associated Press

Q: Why’d the credit card skip dessert?

A: It couldn’t stomach another charge.

the percentage of disposable income that a household doesn’t spend, leaving money available for future goals or emergencies.

In a sentence: July’s retail retreat doesn’t prove families are rebuilding their savings rate, but it shows why a larger cash cushion could matter when prices and confidence are moving in opposite directions.

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