S&P 500 falls from record high as investors weigh data, Middle East tensions

The S&P 500 dipped from record highs on Friday, weighed down by Applied Materials, while investors digested weaker-than-expected retail sales data and transit through the Strait of Hormuz was mostly closed. The S&P 500 was down 0.21% at 7,782.71 points after notching a record high close on Thursday. The Nasdaq declined 0.41% to 26,692.65 points, while the Dow Jones Industrial Average was down 0.15% at 53,761.28 points. Reddit RDDT.N surged more than 10% after the social media company was named a new addition to the S&P 500 index, effective August 18. Workday WDAY.O slipped 3.1%. Reuters reported on Thursday that private equity firm Silver Lake was in talks to acquire the software firm. Shares of some drone makers gained after President Donald Trump said late on Thursday that he would impose tariffs on imports of drones and their components. Red Cat RCAT.O rallied 6.3% and Unusual Machines UMAC.A jumped 22%. Across the U.S. stock market .AD.US, declining stocks outnumbered rising ones by a 1.1-to-1 ratio. The S&P 500 posted 13 new highs and one new low; the Nasdaq recorded 73 new highs and 56 new lows. Applied Materials AMAT.O fell 5.5% after its upbeat quarterly forecast failed to impress investors. The chip equipment maker's shares have doubled in 2026 due to strong demand related to the buildout of AI data centers. With investors nervous about high valuations of AI-related stocks that have soared in recent years, Broadcom AVGO.O dropped 6.8% and the Philadelphia SE Semiconductor index .SOX fell 1.2%. "A lot of the drivers in the market right now are around various parts of AI, and (Applied Materials) is an example of a company that had a 'beat and raise' but expectations were high and so the stock sold off," said Thomas Martin, senior portfolio manager at GLOBALT Investments in Atlanta. Transit through the Strait of Hormuz appeared at a near standstill after two more ships were attacked there and the United States said it could maintain a naval blockade of Iran indefinitely. Those developments added to pessimism after a senior Iranian source said on Wednesday there had been no progress in talks to build on a June agreement to end the war. The S&P 500 energy index .SPNY rose 1.4%, tracking higher oil prices. July retail sales data came in weaker than expected, after an unrevised 0.2% gain in June, the Commerce Department's Census Bureau said. While inflation related to high oil prices remains a concern, recent economic data has investors mostly expecting the Federal Reserve will hold interest rates steady at its meeting in September. Traders see a 67% chance the Fed will keep rates unchanged at the September meeting, with a 33% chance of a hike, according to CME's FedWatch. The University of Michigan's preliminary consumer sentiment survey came in at 51 in August, below expectations of 54.5, according to economists polled by Reuters.

S&P 500 falls from record high as investors weigh data, Middle East tensions

Indexes ease after record close

Notable stock moves and market breadth

AI-related stocks and semiconductors weaken

Middle East tensions and data shape sentiment

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