U.S. data weakens as yields rise and stocks split
U.S. retail sales fell 0.6% in July versus expectations for a 0.1% gain, consumer sentiment dropped to 51, and Treasury yields climbed as small caps held up while tech lagged.
Wall Street’s record run stalled Friday, with the S&P 500 slipping from Thursday’s all-time closing high after retail sales unexpectedly contracted and consumer sentiment fell more than expected.
A fresh leg higher in crude, driven by Washington’s escalating pressure campaign on Iran, split the tape: energy stocks rallied while tech eased.
Retail sales fell 0.6% in July against expectations for a 0.1% gain, while the core measure dropped 0.3% versus a forecast 0.2% increase.
The University of Michigan’s preliminary August sentiment index sank to 51 from 55.2, missing the 55 consensus, even as year-ahead inflation expectations ticked up to 4.3%.
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%.
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%.
Across U.S. equity markets by midday Friday, losses were narrow and concentrated, with small caps and commodity-linked names holding 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. (NASDAQ: 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 (NYSE: 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 the Pro platform: The Vanguard S&P 500 ETF (NYSE: VOO ) slipped 0.2%.
The SPDR Dow Jones Industrial Average ETF Trust (NYSE: DIA ) fell 0.3%.
The Invesco QQQ Trust (NASDAQ: QQQ ) declined 0.6%.
The iShares Russell 2000 ETF (NYSE: IWM ) gained 0.3%.
Sector Movers The Energy Select Sector SPDR Fund (NYSE: XLE ) was the standout, rising 1.5% as crude firmed, with ConocoPhillips (NYSE: COP ) up 1.9% alongside Chevron Corp. (NYSE: CVX ).
At the other end, the Technology Select Sector SPDR Fund (NYSE: XLK ) fell 0.6% and the Health Care Select Sector SPDR Fund (NYSE: XLV ) dropped 0.5%, dragged by a 2.1% slide in Eli Lilly and Co. (NYSE: LLY ).
Defensives and rate-sensitives held up better, with the Utilities Select Sector SPDR Fund (NYSE: XLU ) up 0.5% and the Communication Services Select Sector SPDR Fund (NYSE: XLC ) up 0.4%.
The Financial Select Sector SPDR Fund (NYSE: XLF ) and the Consumer Discretionary Select Sector SPDR Fund (NYSE: XLY ) each edged 0.1% lower.
At the industry level, the split was stark.
The VanEck Oil Services ETF (NYSE: OIH ) jumped 2.8%, the SPDR S&P Metals & Mining ETF (NYSE: XME ) rose 2.2% and the VanEck Gold Miners ETF (NYSE: GDX ) added 1.8%, while the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE: XOP ) gained 1.0%.
On the losing side, the iShares Expanded Tech-Software Sector ETF (BATS: IGV ) shed 1.3% and the VanEck Semiconductor ETF (NASDAQ: SMH ) fell 0.8%.
Friday’s Movers Applied Optoelectronics Inc. (NASDAQ: 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. (NYSE: 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. (NYSE: 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. (NYSE: 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. (NYSE: 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. (NASDAQ: 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 (NYSE: 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.