Surging Retail Sales and Investor Moves Signal Resilient U.S. Economy

Wall Street opens higher after surprisingly strong retail sales data signals resilience in the U.S. economy. Key takeaways include Bank of America's profit fall due to shrinking interest income, UnitedHealth's rise despite medical costs, and notable investor movements. Traders maintain strong bets on the Federal Reserve cutting interest rates in September.

Wall Street was prepared for a higher opening on Tuesday, driven by unexpectedly robust retail sales data indicating ongoing resilience in the U.S. economy. This development has done little to reduce expectations of interest-rate cuts by the Federal Reserve this year, despite mixed corporate earnings reports.

Bank of America reported a drop in second-quarter profit due to reduced interest income and higher provisions for potential credit losses. Nevertheless, its shares climbed 1.7% in premarket trading following a positive net interest-income forecast. Concurrently, Morgan Stanley and Charles Schwab experienced declines after underwhelming revenue results.

Retail sales for June remained flat, defying expectations of a 0.3% decline. Nevertheless, traders are betting heavily on a 25-basis-point rate cut by September's central bank meeting, pricing an 88% likelihood. Investors received mixed signals from political events, including an assassination attempt on Trump, alongside gains in Trump-linked stocks. The broader market optimism was reflected in the upward movement of futures and small-cap indices.

(With inputs from agencies.)