The Thomson Reuters/University of Michigan preliminary consumer sentiment index dropped to 93.3 in July from a final reading of 96.1 in June, missing expectations for an increase to 96.4.

"Consumer confidence continued to meander sidewards with no indication of a potential break in the prevailing positive trend in sentiment. The small loss in early July reflected a slight rise in concerns about international developments which was partially offset by continued news of job gains," the Surveys of Consumers chief economist at the University of Michigan Richard Curtin said.

The drop in the index was mainly driven by declines in the index of current economic conditions and the index of consumer expectations.

The index of current economic conditions declined to 106.0 in July from 108.9 in June, while the index of consumer expectations decreased to 85.2 from 87.2.

The one-year inflation expectations in July was up to 2.8% from 2.7% in May.