*

Earnings on tap: Target ( TGT ), Lowe's, Home Depot ( HD )

*

Walmart ( WMT ) warns of price hikes due to tariffs

*

US retail sales growth slowed in April

By Lewis Krauskopf

NEW YORK, May 16 (Reuters) - A batch of U.S. retail

earnings reports in the coming week is set to shed more light on

the economic fallout from the shifting tariff backdrop and test

the stock market's sharp rebound.

Results from retailers including Target ( TGT ), Home Depot ( HD )

and Lowe's arrive as investors have become less

worried that U.S. President Donald Trump's tariffs will send the

economy into a recession, particularly following the recent

U.S.-China trade truce between the world's two largest

economies.

But a warning from Walmart ( WMT ) on Thursday that the

world's largest retailer will have to start raising prices due

to the high tariffs is putting other retailers in the spotlight,

as investors watch how they are reacting to a trade backdrop

that remains in flux.

"Retailers are going to be incredibly important, especially

after what happened with Walmart's ( WMT ) announcement," said Matthew

Maley, chief market strategist at Miller Tabak.

Maley said it was notable that Walmart's ( WMT ) warning followed

news of the U.S.-China truce, in which both sides are reducing

their extra tariffs that had exceeded 100% for 90 days.

That Walmart ( WMT ) is "still warning about the tariffs that will

be put in place, even though they won't be some of the most

severe ones that everybody was worried about, obviously that

raises some concerns," Maley said.

The potential for tariffs to raise prices that could slow

consumer spending or drive up inflation has worried investors,

particularly since Trump's April 2 "Liberation Day" announcement

of sweeping levies on imports.

The retailers' quarterly reports also will offer the latest

glimpse into the health of consumer spending, which accounts for

more than two-thirds of U.S. economic activity.

Data on Thursday showed U.S. retail sales growth slowed

sharply in April as the boost from front-loading purchases ahead

of tariffs faded, while consumer sentiment and other surveys

have been weak.

"Sentiment is pretty sour," said Jack Ablin, founding

partner and chief investment officer at Cresset Capital. "But

what we have to do is find out if households are really

following through and pulling back on spending."

Results in the coming week also include apparel maker Ralph

Lauren ( RL ) and off-price retailer TJX Cos ( TJX ), with the

various reports offering insight into a number of consumer

segments, investors said.

One topic of interest is whether shoppers will "trade down"

to less expensive items "because people are nervous about rising

prices," said JJ Kinahan, CEO of IG North America and president

of online broker Tastytrade.

Stocks have staged a massive recovery since Trump's April 2

announcement set off extreme volatility and sent stocks

plunging. The benchmark S&P 500 index is up over 18% from

its April closing low and has erased its losses for the year.

The stock market "just continues to bounce back," Kinahan

said.