Good morning and welcome to the stock market today! After hitting new record highs yesterday, stocks are pulling back to start Tuesday. It seems investors are expressing their disappointment with the July retail sales report. Retail sales dropped 1.1% in July, while economists were calling for just a 0.3% dip. This appears to be yet another sign of the delta variant flexing its muscles, and leaving investors to wonder: What will the stock market do today?

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• The S&P 500 is down 0.63%
• The Dow Jones Industrial Average is down 0.67%
• The Nasdaq Composite is down 1%

So what else will the stock market do today? Here are some of the top stories.

What Will the Stock Market Do Today? Buckle Up.

Investors are eager for next-generation automakers like Tesla (NASDAQ:TSLA) and Nio (NYSE:NIO) to make self-driving cars a reality. However, accidents along the way, especially fatal ones, have shown they have the power to rock confidence in the futuristic tech.

Tesla, which does not use light detection and ranging (LiDAR), in its Autopilot feature, has found itself in the spotlight for the wrong reasons. Yesterday, the National Highway Traffic Safety Administration announced it was conducting a safety probe into its Autopilot system, in response to a series of 11 crashes. These accidents mostly occurred when it was dark, and involved stationary emergency response vehicles and personnel.

Then today, another story captured attention. An accident in England involving a Tesla Model 3 left seven people injured, including children. It is not clear if the Autopilot system was involved, but investors are on edge. Just yesterday, we learned about a fatal accident involving a Nio (NYSE:NIO) ES8 and its self-driving system.

So what should investors do? As things stand, these crashes are not about to derail Tesla as an electric vehicle powerhouse, but there is speculation the company will come to embrace LiDAR. We could get details on that as soon as Aug. 19, during its AI shareholder event.

But more specifically, LiDAR stocks stand out as answers in this futuristic world of transportation. They offer safety and security with self-driving cars, and even promise to rule out the dangers of human driver error. InvestorPlace Markets Analyst Joanna Makris recently spoke with Innoviz Technologies (NASDAQ:INVZ), a LiDAR startup, who hopes to play a lead role in this transformation. You can read more about the company — and its thoughts on Tesla and LiDAR — here.

Get Ready for a Back-to-School Spending Blast

Walmart (NYSE:WMT) reported earnings this morning, and generally, investors like what they see. Revenue of $141.05 billion came out nice against expectations for $137.17 billion. Earnings per share of $1.78 also handily topped estimates for $1.57.

The retail giant shared a variety of explanations for its impressive second quarter. It said it was able to gain market share in groceries, as consumers returned to pre-pandemic shopping habits. Walmart also benefitted from a Hot Vax Summer splurge, as shoppers stocked up on party supplies and travel gear.

But another, hard-to-ignore earnings bump came from back-to-school spending. Although households are once again grappling with the return to school amid a pandemic (and how vaccinations and masks will factor in), they are spending more like normal. This is because largely, Americans are looking at a return to in-person schooling this year.

And ahead of this more normal return to school, families are spending big to get ready.

Last summer, many parents were expecting their kids to stay at home all year. This year, they need new clothes and shoes, as well as supplies for in-person learning. Because of the growing relevance of consumer electronics in schooling, parents are also feeling a pinch to spend up on tech. In fact, the National Retail Federation estimates that total back-to-school spending will hit $37.1 billion this year. That is an all-time high, at least based on data the NRF track.

As Alina Selyukh wrote for NPR, there are a variety of reasons for this, including a longing for normalcy. Families are also now benefitting from an up-to-$3,000 child tax credit, which is juicing spending.

So what is the bottom line? With back-t0-school season underway, a handful of retailers are ready to cash in. Some top names could include teen favorites, like Nike (NYSE:NKE), Amazon (NASDAQ:AMZN) and Ulta (NASDAQ:ULTA).

What Else We’re Watching

• Arcimoto (NASDAQ:FUV) was down 15% in after-hours trading after reporting quarterly figures yesterday, but InvestorPlace Markets Analyst Joanna Makris has the inside scoop. Here is what she learned about the electric vehicle startup ahead of earnings.
• As Morning Brew reported yesterday, coffee prices continue to climb, due to extreme weather, a frost and a variety of other supply-chain factors. While coffee giants like Starbucks (NASDAQ:SBUX) will notice little impact, smaller shops will start to feel the pinch. Even at the grocery store, consumers should get ready to shell out bigger bucks for their beans.
• ContextLogic (NASDAQ:WISH) has plunged 27% over the past two days, and more than 80% since January. Although many investors hopped on board ContextLogic for its discount e-commerce status, many have changed their minds. Wish faces a dropping user count and regulatory risks, as well as concerns over product quality.
• According to the Wall Street Journal, companies are sitting on a record amount of cash. Collectively, corporate balance sheets have cash and short-term investments of $6.84 trillion. While that number may seem hard to fathom, it comes in response to ongoing delta variant fears. Although companies have the cash to spend and grow, they are keeping that money close in case the reopening story takes another turn for the worse.

On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.