Wall Street Falls as Oil Prices Rise, Fed Minutes and Retail Earnings in Focus

Wall Street closed lower Monday as investors stepped back following a record-setting week, while rising oil prices and persistent Middle East tensions weighed on market sentiment.

The S&P 500 fell 0.5% to 7,748.14, the Nasdaq Composite declined 0.3% to 26,644.91, and the Dow Jones Industrial Average dropped 0.5% to 53,460.02. The pullback followed a strong week that saw the S&P 500 climb above 7,800 for the first time, supported by solid corporate earnings, technology stocks and easing inflation.

July economic data showed annual consumer and producer inflation moderating across headline and core measures. Combined with weaker-than-expected nonfarm payrolls and soft retail sales, the figures have reduced expectations for another immediate Federal Reserve rate hike.

According to the CME FedWatch tool, markets are pricing in roughly a 67% probability that the Fed will keep interest rates unchanged in September, compared with around a 33% chance of a 25-basis-point increase.

Investors will now focus on the Federal Reserve’s July meeting minutes, due Wednesday. Three regional Fed presidents dissented from the decision to hold rates steady and favored a quarter-point hike, meaning potentially hawkish signals could still influence markets despite cooling inflation.

Energy prices remain another major risk. Brent crude climbed above $90 per barrel Monday after gaining nearly 6% the previous week. Oil markets remain sensitive to tensions between the United States and Iran over the Strait of Hormuz, with little evidence of a lasting diplomatic breakthrough. Higher energy costs could push U.S. inflation higher again in August and complicate the Fed’s policy outlook.

Corporate earnings will also shape Wall Street this week, particularly reports from major U.S. retailers. Home Depot and Walmart are expected to post revenue growth despite consumer uncertainty and housing affordability pressures. Investors will closely examine Walmart’s e-commerce, advertising and membership businesses, as well as Home Depot’s demand from professional customers.

Target and Lowe’s are also scheduled to report, offering additional insight into U.S. consumer spending and the health of the retail sector.