Consumer Spending: A Ticking Time Bomb for the Stock Market

The stock market's performance in the upcoming week could be influenced by two key economic data points: the consumer-price index (CPI) for August and monthly U.S. retail sales. Despite high credit-card interest rates and inflation above the Fed's target rate, consumers have continued to spend, keeping the economy afloat. Factors such as low household debt-to-income ratios, rising wages, and a decade of underbuilding in the housing market have contributed to this resilience. While some worry about a recession, others believe that higher interest rates are manageable, and strong corporate profits will drive the market higher.