US stocks moved higher on Tuesday, with the Dow Jones Industrial Average setting another all-time high, as investors digested weaker-than-expected retail sales data and looked ahead to key labor market and inflation reports later in the week.
The Dow Jones Industrial Average rose 239 points, or about 0.5%, extending its recent run of record highs.
The S&P 500 edged up 0.1%, while the Nasdaq Composite also traded 0.1% higher.
The gains came even as fresh economic data pointed to a slowdown in consumer spending at the end of the year, underscoring the mixed signals facing markets.
Retail sales disappoint
The latest retail sales report showed that consumer spending was flat in December, falling short of expectations for a 0.4% monthly increase, according to economists surveyed by Dow Jones.
The reading followed a 0.6% rise in November.
The data was released by the US Commerce Department, which said sales were unchanged on a seasonally adjusted basis, though not adjusted for inflation.
Excluding autos, retail sales were also flat, compared with expectations for a 0.3% increase.
On a year-on-year basis, retail sales rose 2.4% in December, slowing from a 3.3% pace in November.
Sales excluding autos were up 3.3% from a year earlier.
The report suggested that consumer activity slowed sharply during the December holiday shopping season, following a period of relatively resilient spending earlier in the year.
The Commerce Department cited a combination of rough weather, tariff-related impacts and persistently higher inflation as factors weighing on shopping activity.
While higher-income consumers continued to spend more freely through much of 2025, the data indicated that households at the lower end of the income spectrum remained more cautious.
Markets build on recent rebound
Despite the softer consumer data, Wall Street extended its recent advance. Tuesday marked the start of the third straight day of gains for major indexes.
In the previous session, the Dow rose 0.04%, setting new intraday and closing records, while the S&P 500 gained about 0.5% and the Nasdaq Composite climbed 0.9%.
Technology stocks led Monday’s rally, building on a rebound that began late last week.
Investors have grown more optimistic that the market can sustain its upward momentum after last week’s sell-off, which was driven by concerns over software companies and megacap technology stocks, and failed to cause significant technical damage.
The S&P 500 has since reclaimed levels above its 50-day and 100-day moving averages after briefly slipping below them last week.
Traders often view that recovery as a bullish signal, particularly as several other asset classes have recently outperformed the broader index.
Focus shifts to jobs and inflation
Investor attention is now turning to a pair of high-stakes economic releases that could shape expectations for monetary policy.
The monthly US jobs report is due on Wednesday, followed by the January consumer price index on Friday.
Both reports are expected to influence market views on the strength of the economy and the trajectory of inflation, as well as the Federal Reserve’s next policy steps.
With stocks trading near record levels, market participants said upcoming data will be closely scrutinised for any signs that economic momentum is cooling more sharply than expected or that inflation pressures are reaccelerating.
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