(Bloomberg) — Wall Street traders sent stocks down from all-time highs, with a weak reading on consumer sentiment and an increase in inflation expectations tempering optimism about solid retail sales.
The end of a week that saw investors juggling contradictory signs on the inflation front also brought inconclusive indications about how Americans are feeling about the economy. Following a a 30% surge from its April lows, the S&P 500 retreated.
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Treasuries fell across the curve, with longer-dated maturities leading the way. Attention will soon shift to next week’s central bank gathering in Jackson Hole, Wyoming, with traders getting ready for Jerome Powell’s speech.
US retail sales rose in July in a broad-based advance, boosted by car sales and major online promotions. Later, a separate report showed consumer sentiment unexpectedly fell for the first time since April and inflation expectations rose.
“Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April,” said Peter Boockvar, author of The Boock Report. “However, consumers continue to expect both inflation and unemployment to deteriorate in the future.”
To Bill Adams at Comerica Bank, while the data don’t all point in the same direction, the US economy looks to be in OK shape.
“What consumers do is more important to the economy than what they say,” he said.
Investors also awaited a face-to-face summit between Donald Trump and Vladimir Putin in Alaska due to start at 3 p.m. New York time.
To Bret Kenwell at eToro, July’s retail sales figures weren’t necessarily a blowout. However, control group sales — which are used in the gross domestic product calculation — topped economists’ expectations, while June’s already strong report was revised even higher.
Retailers will start reporting earnings next week, which should provide more insights into consumer behavior, he noted.
As long as consumer spending holds up and companies are able to retain workers because of that robust spending, the flywheel can continue to spin, pushing corporate profits and stock prices higher, according to Chris Zaccarelli at Northlight Asset Management.
US stocks are set to decline in the event of dovish signals from the Federal Reserve at the Jackson Hole economic symposium as investors “buy rumor, sell fact,” according to Bank of America Corp. strategists led by Michael Hartnett.
Money markets still see high odds of a Fed rate cut in September, with at least two reductions by the end of the year.
Investors poured about $21 billion into US equity funds in the week through Aug. 13, after redeeming nearly $28 billion in the week prior, according to the note citing EPFR Global data.
Corporate Highlights:
The Trump administration is considering using funds from the US Chips Act to take a stake in the beleaguered American chipmaker Intel Corp., according to people familiar with the discussions. Applied Materials Inc., the largest American producer of chipmaking gear, gave a disappointing sales and profit forecast, renewing concerns that the US trade dispute with China is weighing on demand. UnitedHealth Group Inc. jumped after funds piled into the company, which has been hampered by a federal probe into its business practices and weakening results. Warren Buffett’s Berkshire Hathaway Inc. was among the investors, buying 5 million shares, according to a filing. David Tepper’s Appaloosa Management LP also invested, boosting its holdings of the health insurance giant by 2.3 million shares. Swiss chocolatier Lindt & Spruengli AG may shift production of its world-famous, gold-wrapped Easter bunnies to the US to sidestep import tariffs. Danish jewelry company Pandora A/S is weighing potential price increases in the US due to higher tariffs, according to its chief executive officer. AstraZeneca Plc released its flu vaccine nasal spray for at-home use on Friday, an option that comes at a contentious time for vaccine access in the US. Some of the moves in markets:
Stocks
The S&P 500 fell 0.3% as of 12 p.m. New York time The Nasdaq 100 fell 0.5% The Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 was little changed The MSCI World Index was little changed Bloomberg Magnificent 7 Total Return Index fell 0.3% The Russell 2000 Index fell 0.6% Currencies
The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.5% to $1.1706 The British pound rose 0.2% to $1.3562 The Japanese yen rose 0.5% to 147.01 per dollar Cryptocurrencies
Bitcoin fell 0.5% to $117,352.15 Ether fell 2.3% to $4,431.94 Bonds
The yield on 10-year Treasuries advanced three basis points to 4.32% Germany’s 10-year yield advanced eight basis points to 2.79% Britain’s 10-year yield advanced five basis points to 4.70% The yield on 2-year Treasuries advanced one basis point to 3.75% The yield on 30-year Treasuries advanced four basis points to 4.92% Commodities
West Texas Intermediate crude fell 1.2% to $63.19 a barrel Spot gold rose 0.2% to $3,342.17 an ounce ©2025 Bloomberg L.P.