The retail sector remains in focus this week after heavyweights Walmart (WMT  ) and Home Depot (HD  ) both issued warnings over the health of the U.S. consumer in annual forecasts for 2023.

So far this year, retail-focused exchange-traded fund SPDR S&P Retail ETF (XRT  ) has outperformed the broader market S&P 500 (SPY  ) as the American consumer continued to spend despite higher interest rates and stubbornly high inflation. This is demonstrated by January's stronger-than-expected U.S. retail sales rising 3% month-over-month to $697 billion.

Now, those increased spending pressures may be taking hold.

Walmart forecasted same-store sales for U.S. locations to rise between 2% and 2.5%, excluding fuel, in the current fiscal year, coming below estimates. The retailers also anticipates softer-than-expected adjusted earnings per share to range from $5.90 to $6.05 per share in the year through January 2024.

"There is considerable pressure on the consumer," CFO John David Rainey said during the company's earnings call on Tuesday. "Given the persistence of high prices and the potential for further macro pressures, we're taking a cautious outlook for the year."

Rainey added that Walmart is shifting its inventory to reflect more in-demand items like food and other "high-frequency purchase areas of general merchandise" to account for a forecasted decline in sales as consumers are expected to have a tighter shopping budget in the year ahead.

Meanwhile, Home Depot reported fourth-quarter revenue that missed expectations as the company faces a slowdown in home improvement spending. This was the first time the retailer fell short of Wall Street's revenue estimates since November 2019.

The retailer said it expects sales and comparable sales to be flat for the current fiscal year, reflecting a shift in consumer spending habits amid a housing market slowdown in response to higher costs and mortgage rates. CFO Richard McPhail told CNBCthat the company is observing a broader consumer spending shift away from goods to services.

"During COVID, we saw a shift into goods. Over the last really almost two years, we've seen a gradual shift back away from goods into services and we think our market has reflected that and we think that that dynamic could put some pressure on our market," McPhail said, quoted by CNBC.

Supporting the retailers' soft guidance, the S&P Global forecasted U.S. retail sales will grow by 0.5% this year, or a decline of 0.1% when accounting for inflation, before returning to slower than pre-pandemic growth level afterward. This forecast reflects expectations that consumer will pull-back on spending more than previous years as demand wanes.

Being members of the Dow 30, Walmart and Home Depot's moves tend to have have broader market impact. Currently over 300 ETFs hold exposure to Home Depot, while Walmart shares are in over 200 ETFs.