Earnings this week from major retailers should also provide a fresh, close up look at consumers as back-to-school shopping gets underway. Macy's reports Wednesday morning, and others, like Nordstrom and Wal-Mart report later in the week. According to Thomson Reuters, Macy's same- store sales were expected to rise 4 percent in the second quarter and earnings are expected at $0.86 per share.
"What I would say is consumer spending is a critical part of the moderate recovery. Consumer spending isn't as strong as it was in prior cycles, and that's part of the reason why overall real GDP growth is not as strong either," Maki said. "But on the other hand, it is a key reason why the economy continues to grow at a pace fast enough to increase employment and keep the unemployment rate falling. One could look at it from either perspective."
Read MoreGeopolitics posing 'uneasy comfort' for oil markets
While geopolitics have rocked markets lately, oil has diverged. It rose on initial news of Sunni radicals capturing territory in Iraq, but has since fallen off on the view that the world is well supplied. Clashes between the radical group ISIS and Kurdish forces continued in Iraq. Iran Tuesday as well as Iraq's most powerful Shiite militia endorsed Iraq's new prime minister designate Haider al-Abadi. The endorsement dealt a blow to Nouri al-Maliki, who has been struggling to hold onto power and vowing to fight Abadi's formation of a new government.
Yet oil fell Monday after the International Energy Agency said while the situation in several producing countries is riskier than ever, supplies are ample and there is a glut building in the Atlantic basin. Brent was at a 13-month low and U.S. West Texas Intermediate fell $0.71 to $97.37 per barrel. As a result, energy was the worst performing S&P industry sector, down 0.7 percent Tuesday.
"I was kind of surprised that the IEA about global demand brought the sellers out of the woodwork. There seems to be a consensus that the fundamentals are weak. There's a lot of African and North Sea oil trying to find a home," said Gene McGillian, analyst with Tradition Energy. "Nobody's worried even though it seems that things are escalating in Iraq. Nobody seems to care."