The S&P 500 Index ($SPX) (SPY) on Friday fell by -0.17%, the Dow Jones Industrial Average ($DOWI) (DIA) fell by -0.20%, and the Nasdaq 100 Index ($IUXX) (QQQ) fell by -0.13%. E-mini S&P futures (ESU26) fell -0.27%, and September E-mini Nasdaq futures (NQU26) fell -0.16%. Stocks ended Friday lower on weak US retail sales and consumer sentiment reports.
The weak US economic reports slightly reduced the odds of a September Fed rate hike to 32% from 35% but also sparked worries about a weaker US economy and weaker corporate earnings. The stock market was also concerned that the 10-year T-note yield rose by +5 bp despite the weak US economic reports, as inflation worries continue. Analysts Keep Hiking Micron's Revenue and Price Forecasts - Shorting MU Puts Works Here GOOGL Stock Alert: Google Unleashes Its Biggest Weapon Against Apple Applied Materials Stock Is Down on Earnings.
Here's What Barchart Options Data Says Could Come Next for AMAT. Stop Missing Market Moves: Get the FREE Barchart Brief – your midday dose of stock movers, trending sectors, and actionable trade ideas, delivered right to your inbox. US tech stocks saw carry-over support from an overnight rally of more than +2% in the South Korean Kospi index, with Samsung Electronics and chip-maker SK Hynix rallying by more than +15% this week.
However, US chip stocks were weak on Friday on poor momentum and higher T-note yields, with the iShares Semiconductor ETF closing the day lower. July US retail sales fell -0.6% m/m, much weaker than market expectations of +0.1%. Ex-autos and gas, July retail sales fell -0.2% m/m, weaker than market expectations of +0.3%.
July's weak month-on-month retail sales report was partly due to technical factors, as June sales were temporarily bolstered by World Cup spending and by Amazon's Prime Day being held in June rather than in July last year. Yet, the weak retail sales report suggested that US consumers are pulling back due to high prices, increased gasoline costs, and a lack of confidence in their finances. The University of Michigan's preliminary August US consumer sentiment index fell by -4.2 points to 51.0, weaker than market expectations for only a small -0.2 point decline to 55.0 from July's 55.2.
Stocks had ongoing support from the favorable US inflation reports released earlier this week. Wednesday's July core CPI fell to match the 5.5-year low of +2.5% y/y originally posted early this year. The nominal July CPI fell to +3.4% from June's +3.5% but remained well above the 5.5-year low of +2.3% posted last year.
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