Wall Street's record run hit a speed bump on Friday. The S&P 500 slipped from Thursday's all-time closing high after retail sales unexpectedly contracted and consumer sentiment came in worse than expected. It's the kind of day that makes you wonder if the market is finally paying attention to the macro data again, or just taking a breather.
The culprit was a one-two punch of soft economic reads. Retail sales fell 0.6% in July, against expectations for a 0.1% gain. The core measure, which strips out autos and gas, dropped 0.3% versus a forecast 0.2% increase. Meanwhile, the University of Michigan's preliminary August sentiment index sank to 51 from 55.2, missing the 55 consensus. Even the inflation expectations component didn't help: year-ahead expectations ticked up to 4.3%. So consumers are feeling worse and spending less, but they still think prices will rise. That's a fun combination.
You might think weak data would send bond yields lower, but Treasuries sold off anyway, and the curve steepened. The 10-year yield climbed 5 basis points to 4.69%, the 30-year rose 6 basis points to 5.27%, while the 2-year barely budged at 4.16%. The market seems to be saying, "We're not so sure the Fed is done hiking," even as rate-hike expectations moved the other way. On Polymarket, the probability that the Fed leaves rates unchanged after its September meeting jumped 5 points to 76%, while odds of a 25-basis-point hike fell 5 points to 24%. So the data is weak, but the bond market is pricing in less easing? It's a confusing tape, but that's markets for you.
Across U.S. equity markets by midday Friday, losses were narrow and concentrated. Small caps and commodity-linked names held firm against a heavy technology tape. The S&P 500 eased 0.2% to 7,784. The Nasdaq 100 was the clear laggard, down 0.6% to 29,912. SanDisk Corp. (SNDK) rallied 7%, extending a powerful weekly rally following its Investor Day. The Russell 2000 bucked the trend, adding 0.3% to 3,062 and extending record highs. Gold, as tracked by the SPDR Gold Shares (GLD), advanced 0.9% to $4,389.77 an ounce, extending a second straight weekly gain.
Friday's Performance In Major US Indices
| Index | Last | % Change |
|---|
| S&P 500 | 7,784.21 | -0.2% |
| Dow Jones | 53,700.56 | -0.3% |
| Nasdaq 100 | 29,911.89 | -0.6% |
| Russell 2000 | 3,061.65 | +0.3% |
Updated by 12:15 PM ET
According to market data:
- The Vanguard S&P 500 ETF (VOO) slipped 0.2%.
- The SPDR Dow Jones Industrial Average ETF Trust (DIA) fell 0.3%.
- The Invesco QQQ Trust (QQQ) declined 0.6%.
- The iShares Russell 2000 ETF (IWM) gained 0.3%.
Sector Movers
The Energy Select Sector SPDR Fund (XLE) was the standout, rising 1.5% as crude firmed, with ConocoPhillips (COP) up 1.9% alongside Chevron Corp. (CVX). At the other end, the Technology Select Sector SPDR Fund (XLK) fell 0.6% and the Health Care Select Sector SPDR Fund (XLV) dropped 0.5%, dragged by a 2.1% slide in Eli Lilly and Co. (LLY).
Defensives and rate-sensitives held up better, with the Utilities Select Sector SPDR Fund (XLU) up 0.5% and the Communication Services Select Sector SPDR Fund (XLC) up 0.4%. The Financial Select Sector SPDR Fund (XLF) and the Consumer Discretionary Select Sector SPDR Fund (XLY) each edged 0.1% lower.
At the industry level, the split was stark. The VanEck Oil Services ETF (OIH) jumped 2.8%, the SPDR S&P Metals & Mining ETF (XME) rose 2.2% and the VanEck Gold Miners ETF (GDX) added 1.8%, while the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) gained 1.0%. On the losing side, the iShares Expanded Tech-Software Sector ETF (IGV) shed 1.3% and the VanEck Semiconductor ETF (SMH) fell 0.8%.
Friday's Movers
Applied Optoelectronics Inc. (AAOI) led the Russell 1000 with a 15.4% surge, extending gains tied to its record second-quarter revenue of $191.9 million, up 86%, with datacenter sales up 140% to $107.7 million and third-quarter guidance implying 33% to 51% sequential growth as the company scales toward 650,000 units per month by year-end.
Reddit Inc. (RDDT) rallied 13.1% after S&P Dow Jones Indices said the company will join the S&P 500 before the open on Aug. 18, replacing AvalonBay Communities Inc. (AVB), which is exiting ahead of its all-stock merger with Equity Residential. Reddit becomes only the second pure-play social media name in the benchmark after Meta.
Nu Holdings Ltd. (NU) climbed 9.8% after reporting quarterly net income above $1 billion for the first time in its history Thursday after the close, on gross revenue of nearly $5.9 billion, up 39%, a 37% larger credit portfolio and 139 million customers. Early delinquencies improved to 4.85% from 5.02% in the prior quarter.
MP Materials Corp. (MP) advanced 8.7%, riding the same rare-earth and hard-asset bid that lifted metal stocks, after its Aug. 6 second-quarter report showed revenue up 89% to $108.5 million against a $96 million consensus, NdPr oxide and metal sales up 277%, and a nine-figure gadolinium supply agreement with a U.S. aerospace and defense customer.
Almonty Industries Inc. (ALM) rose 8.1%. There was no fresh company-specific headline in Friday's tape; the move tracks a continued melt-up in European tungsten prices toward $3,075 per metric tonne unit from $453 a year ago and the ongoing ramp at its Sangdong mine in South Korea.
On the downside, Bullish (BLSH) was the worst performer, sliding 8.2% as investors continued to digest Thursday morning's second-quarter print, which paired 62% revenue growth to $92.6 million with a $280 million net loss.
Duolingo Inc. (DUOL) fell 7.2% on no confirmed catalyst Friday. The slide extends a post-earnings de-rating that has drawn a string of analyst cuts this month, including a Bank of America downgrade to Underperform with a $93 price target and a JPMorgan move to Hold with a $95 target, as the company prioritizes daily active user growth over near-term bookings.
Doximity Inc. (DOCS) dropped 6.2% with no confirmed news catalyst in the tape; the stock has now fallen roughly 40% year-to-date since May's guidance-driven collapse and sits near multi-year lows.
Broadcom Inc. (AVGO) tumbled 5.3% to $395 on no fresh company-specific news, with the move consistent with profit-taking and valuation de-risking ahead of its fiscal third-quarter report in early September.
Applied Materials Inc. (AMAT) slid 5.1% despite beating on the bottom line Thursday after the close, posting fiscal third-quarter earnings of $3.50 per share versus $3.45 expected. Revenue of $9.12 billion narrowly missed the $9.18 billion consensus, and the top-line shortfall was enough to sink a stock that had more than doubled year-to-date before a violent July drawdown.
