Wall Street rises after soft US retail sales data

The S&P 500 and the Dow have risen following softer-than-expected US retail sales numbers, with focus on commentary from a slew of Federal Reserve officials later in the day.

Data showed US retail sales rose 0.1 per cent in May, versus the 0.3 per cent increase expected by economists polled by Reuters, as lower petrol prices weighed on receipts at service stations.

Markets slightly increased bets on two interest rate cuts from the Fed this year following the data, according to LSEG's FedWatch.

"The weaker-than-expected data's telling me that consumers are still having a difficult time and that the economy is still moving forward but at a slower pace," Robert Pavlik, senior portfolio manager at Dakota Wealth Management, said.

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"The Fed has to start thinking about cutting interest rates, perhaps sooner than the end of the year."

A separate report showed May industrial production and manufacturing output both rose 0.9 per cent, beating expectations.

Chip stocks continued their recent rally, boosting the Philadelphia SE Semiconductor index to a record high.

Qualcomm, US-listed shares of Taiwan Semiconductor Manufacturing Co, Arm Holdings and Micron were up between 1.3 per cent and 5.0 per cent.

The Nasdaq was flat, with losses in Alphabet, Amazon and Meta Platforms offset by gains in chip stocks.

Tech shares lifted the benchmark S&P 500 to its fifth record high close in six sessions on Monday, and the Nasdaq to its sixth consecutive record close.

Trading volumes are expected to be light, with markets shut on Wednesday for the Juneteenth holiday.

Energy was the top S&P 500 sector gainer, up 1.5 per cent, while utilities were the worst hit.

Focus will be on comments from Fed officials for clues on how the US central bank's members view the current economic situation and path ahead for monetary policy, after recent projections showed the Fed now sees just one interest rate cut this year instead of the three previously forecast.

New York Fed President John Williams said rates will come down gradually over time but declined to comment on the timing of it.

Six other Fed speakers are scheduled for Tuesday, including voting committee member Adriana Kugler.

Hopes for multiple rate cuts this year, enthusiasm for AI-linked companies and strong earnings from other tech firms have supported equities.

Citigroup raised the year-end target for the S&P 500 to 5,600 points from 5,100.

In early trading on Tuesday, the Dow Jones Industrial Average was up 88.24 points, or 0.23 per cent, at 38,866.34, the S&P 500 was up 9.62 points, or 0.18 per cent, at 5,482.85, and the Nasdaq Composite was down 4.66 points, or 0.03 per cent, at 17,852.36.

Homebuilder Lennar fell 2.2 per cent after forecasting lower-than-expected third-quarter home deliveries.

Edtech company Chegg jumped 21.6 per cent after announcing job cuts as part of a restructuring plan.

Advancing issues outnumbered decliners for a 1.92-to-1 ratio on the NYSE and a 1.14-to-1 ratio on the Nasdaq.

The S&P index recorded 30 new 52-week highs and two new lows while the Nasdaq recorded 32 new highs and 57 new lows.