US retailers brace for bigger consumer stress test as war drags on

U.S. retailers face growing consumer stress as the Iran war enters its fourth month, keeping fuel prices elevated and squeezing lower-income households. Recent quarterly reports show consumers still spending but shifting toward essentials and value, boosting some apparel and beauty names while hurting budget-focused chains. Analysts warn sustained national average gasoline above $4.00/gal through summer and back-to-school could curb discretionary spending, which matters because retailers typically record roughly 50–60% of annual revenue in H2. LSEG data show S&P 500 consumer discretionary earnings growth is projected to slow to about 5.2% in Q2 from a prior 40.4% forecast — a development that could weigh on the US SP 500 if the trend persists. Overall, the piece is a cautionary market commentary highlighting uneven, K-shaped consumer recovery and potential downside risk to retail-linked market performance if energy-driven inflation remains elevated.