Fed: Consumption slowdown shapes outlook – DBS

💡 DMK Insight

US consumption is showing cracks, and here’s why that matters for traders: With softer retail sales momentum in 4Q25 and downgraded GDP estimates, traders should brace for potential volatility in markets tied to consumer spending. This slowdown could impact sectors like retail and consumer discretionary stocks, which are often sensitive to shifts in consumer behavior. If the trend continues, we might see a ripple effect across related assets, including commodities and currencies that rely on US consumption patterns. Look for key technical levels in the S&P 500 and consumer-related ETFs; a break below recent support could signal further downside. Additionally, keep an eye on economic indicators like the Consumer Confidence Index and jobless claims, as these could provide more context on consumer sentiment. The real story is how this slowdown might influence Federal Reserve policy, especially if inflation remains a concern. Traders should monitor the Fed’s next moves closely, as they could pivot based on these consumption trends.