NEW YORK — The Dow Jones Industrial Average declined in early trading Monday, falling 167.62 points, or 0.31%, to 53,564.79 as of 9:35 a.m. EDT, as investors digested weaker-than-expected U.S. retail sales data and assessed the outlook for Federal Reserve policy.

The blue-chip index opened lower following a Friday close of 53,732.41, when it dropped 107.58 points, or 0.20%. That left the Dow down about 0.56% for the prior week, snapping a two-week winning streak and marking its largest weekly decline since mid-July. The index remains well above levels from a year earlier, up roughly 19% over the past 12 months and more than 11% year to date, though it has pulled back from a record close near 54,349 reached earlier in August.

Soft July retail sales figures released Friday showed a 0.6% month-over-month decline, missing economists’ expectations of a 0.1% increase and representing the steepest drop since May 2025. The data, combined with recent softer readings on jobs and producer prices, prompted markets to scale back the probability of a September interest-rate increase by the Federal Reserve. Traders assigned a roughly 31% chance of a 25-basis-point hike next month, down sharply from near even odds a week earlier, according to CME Group’s FedWatch tool.

Broader markets showed a mixed picture early Monday. Futures pointed to modest gains for the technology-heavy Nasdaq 100 and slight advances or flat performance for the S&P 500, while Dow futures indicated further pressure on the industrials-heavy index. Memory-chip makers including Micron Technology and Sandisk extended gains in premarket activity, supported in part by strong revenue commentary from AI-focused companies. The S&P 500 had closed the previous week at a record after three consecutive weekly advances.

Oil prices remained elevated amid ongoing tensions in the Middle East, with Brent crude trading near $90 a barrel. Elevated energy costs have kept some inflation concerns alive even as softer domestic spending data eased near-term rate fears. The dollar touched multi-week lows against a basket of currencies following the recent run of U.S. economic reports.

The Dow’s composition, weighted toward industrial, financial and consumer companies, has left it more sensitive to shifts in economic growth expectations than the more technology-focused Nasdaq. Transportation shares were under pressure in early trading, while utilities showed relative resilience. Volatility measures edged higher but remained at moderate levels by historical standards.

Investors this week will focus on a slate of major retailer earnings, including reports from Walmart, Target and Home Depot, for further clues on consumer spending. Federal Reserve meeting minutes due Wednesday are also expected to provide insight into policymakers’ latest thinking on the balance between growth and inflation risks. Strong corporate earnings overall this season have underpinned equity gains in recent months, even as geopolitical developments and questions about the durability of AI-related spending have introduced periodic caution.

The Dow remains more than 20% above its 52-week low and sits within striking distance of its all-time highs set earlier this month. Year-to-date gains continue to reflect a resilient corporate profit backdrop and expectations that any further monetary tightening will be limited. Still, the early decline Monday underscored ongoing sensitivity to incoming economic data after the index’s recent stretch of record territory.

Market participants noted that summer trading volumes often remain lighter, which can amplify moves on relatively modest news flow. The Cboe Volatility Index rose modestly in early dealings, reflecting a slight uptick in expected near-term swings. Global equities were mixed overnight, with European indexes starting the week higher in some cases on strength in technology and pharmaceutical shares.

Looking further ahead, attention will remain on whether softer consumer data continues to reduce the likelihood of aggressive Fed action or whether resilient labor markets and sticky services inflation reassert themselves. For the Dow, the immediate focus stayed on the path of industrial and consumer discretionary components as retailers prepare to report quarterly results.

The index’s pullback early Monday left it trading near session lows after an opening range that saw prices move between roughly 53,562 and 53,663. Prior closes in recent sessions had clustered in the mid-53,000s following the early-August peak. Despite the day’s pressure, the broader multi-month uptrend remained intact, supported by solid earnings and a gradual shift in rate expectations.

As trading continued, investors weighed the competing forces of cooler spending data against lingering geopolitical and energy-price risks. The Dow’s performance Monday highlighted the selective nature of recent market leadership, with technology shares showing more resilience than traditional industrial names in the opening hours.