Markets Eye US PCE Inflation and Retail Earnings for Fed Policy Cues

Key Facts

1Markets are awaiting the release of the US Personal Consumption Expenditures (PCE) price index data next week.

2A revised reading of first-quarter GDP and updates on consumer confidence are scheduled for release.

3Retail earnings season will begin providing a clearer picture of the state of the US consumer.

Global financial markets are awaiting the release of the US Personal Consumption Expenditures (PCE) price index next week, the Federal Reserve's preferred inflation gauge. According to reports, a revised reading of first-quarter GDP and fresh updates on consumer confidence are also scheduled for release. Additionally, the retail earnings season is set to begin, providing a clearer picture of the health and spending power of the US consumer.

This anticipation comes amid mixed regional economic signals, with the NY Empire State Manufacturing Index hitting 19.6, significantly beating the 7.5 forecast as of May 15, 2026, per market data. Conversely, retail sales in China grew by only 0.2% year-on-year, missing the 2% forecast, which heightens concerns regarding global consumption trends that impact major retailers like Walmart and Target.

Looking ahead, traders are monitoring sentiment levels following a 3.5% improvement in the Australian Westpac Consumer Confidence index on May 19, 2026. According to the upcoming economic calendar, the PCE inflation data remains the primary catalyst for market direction. Should the figures exceed expectations, equity markets may face pressure as expectations for near-term interest rate cuts diminish.