Household spending test

Personal spending is the cleanest look at how hard households are still pushing the economy. The estimate has eased to 0.5% from 0.9%, so the key question is whether consumers are simply normalizing or starting to pull back. With consumer cyclical names leading recently, this release can either confirm that strength or cool it off.

1. Beat above 0.5%: Stronger spending would say households are still willing to open their wallets. That supports consumer-led parts of the market, but if it comes with firm inflation, it can also keep rate worries alive.

2. Miss below 0.5%: A weaker print would point to cooler demand and a more cautious consumer. That tends to hit retailers, travel, and other discretionary names first, especially if the spending slowdown looks broad.

3. In line at 0.5%: That would read as a healthy step down from April's 0.9%, not a collapse. Markets may take it as proof that consumption is normalizing rather than cracking.

This is the most direct link: the spending line tells you how much demand is still flowing to retailers, autos, leisure, and other discretionary businesses. Stronger spending helps those names; weaker spending takes the edge off quickly.