Auto sales might have been sluggish last month due to a crippling cyberattack on car dealerships, but if you ignore their spontaneous combustion, it seems Americans have revved up their shopping engines. Excluding four-wheeled expenses, June US retail sales saw the most significant increase since the start of 2023, jumping 0.8% from last month. With inflation cooling and the Fed eying rate cuts, the unexpected boost shows that consumers are spending once again.

• The growth was primarily driven by health and personal care stores, building materials, and gardening stores.
• Cumulative retail sales — including auto and gas — were unchanged month-over-month but exceeded Bloomberg analysts’ -0.3% estimate.

Expectations too high? Stronger economic data and earnings have increased investor expectations heading into second-quarter reports. Wall Street’s crystal ball echoes this optimism, with FactSet’s latest analyst aggregate forecasting the S&P 500 will climb above 6K over the next 12 months — a nearly 8% return. However, these numbers overlook a widening rift among American spenders. While well-to-do consumers continue their spending sprees, lower-income shoppers are pulling back due to inflation. Wall Street only sees green, but can high-roller splurges continue to outpace a broader spending slowdown?