Retail mounts a mini rally after McDonald’s earnings report lifts the spirits of investors

The retail sector appears to be getting a lift on Wednesday from a mix of better-than-anticipated earnings reports and renewed optimism that the Federal Reserve may soon cut interest rates. In addition, there is a sense that some companies have been able to absorb the cost of tariffs or gently pass them on to consumers.

A potential catalyst for the retail sector move was the second-quarter earnings report from McDonald’s (MCD), which topped the expectations of analysts and featured same-store sales growing at the fastest pace in almost two years.

Notable gainers in afternoon trading included Walmart (WMT) +3.8%, Amazon (AMZN) +3.3%, Target (TGT) +3.2%, Ross Stores (ROS) +2.6%, Dollar General (DG) +2.5%, Costco (COST) +2.4%, and EBay (BAY) +2.2%.

The Consumer Discretionary Select Sector SPDR Fund ETF (NYSEARCA:XLY) was up 1.7%, and the SPDR S&P Retail ETF (NYSEARCA:XRT) showed a 1.6% gain vs. the 0.6% increase for the S&P 500 Index.