Stocks Slip Amid Mixed Economic Data and Inflation Concerns

The S&P 500 Index ($SPX) (SPY) is down -0.05%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.15%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.06%. September E-mini S&P futures (ESU26) are down -0.11%, and September E-mini Nasdaq futures (NQU26) are down -0.12%.

Stocks retreated from earlier gains following disappointing U.S. retail sales and consumer sentiment data. While the soft economic figures reduced expectations for a Federal Reserve rate hike in September to 29% from 35%, they also fueled concerns regarding economic growth and corporate earnings. Market participants remain uneasy as the 10-year Treasury yield rose by 3 basis points despite the weak data, underscoring persistent inflation pressures.

U.S. technology stocks received some support overnight due to a surge of over 2% in South Korea’s Kospi index, driven by strong performance from Samsung Electronics and SK Hynix. However, domestic chip stocks struggled today, with the iShares Semiconductor ETF (SOXX) declining mildly.

U.S. retail sales for July dropped -0.6% month-over-month, significantly missing forecasts for a +0.1% increase. Excluding autos and gasoline, sales fell -0.2%, below the projected +0.3%. Technical factors contributed to the decline, including elevated spending during June’s World Cup and Amazon’s Prime Day events. Nonetheless, the data signals that consumers may be tightening their budgets amid high prices and rising fuel costs.

The University of Michigan’s preliminary August consumer sentiment index declined by 4.2 points to 51.0, falling short of expectations for a modest dip to 55.0 from July’s reading of 55.2.

Earlier this week, positive inflation reports provided some relief to equity markets. Core CPI for July matched the five-and-a-half-year low of +2.5% year-over-year, while headline CPI eased slightly to +3.4%. Producer prices also showed signs of moderation, with the July PPI declining to +4.7% year-over-year, down from May’s 3.5-year high of +5.9%. Core PPI cooled further to +4.1%.

September WTI crude oil prices (CLU26) rose +0.7%, supported by news of attacks on Abu Dhabi oil tankers near the Strait of Hormuz. However, oil prices retreated from recent peaks as the Trump administration signaled a shift toward economic sanctions over military action to pressure Iran into reopening the strategic waterway.

Tensions in the Strait of Hormuz show little sign of resolution. An Iranian military official stated that safe passage requires Tehran’s approval, dismissing President Trump’s assertion of U.S. control over the region. The administration is expected to unveil new economic measures targeting Iran in response to ongoing disruptions.

Strong second-quarter earnings continue to act as a supportive force. The S&P 500 is projected to deliver earnings growth close to 32%, outpacing estimates of +23% and marking one of the strongest performances since 2013. Artificial intelligence investments are anticipated to drive nearly 60% of the index’s earnings per share growth, according to Bloomberg Intelligence. To date, 85% of companies within the S&P 500 that have reported results have exceeded earnings expectations.

Market sentiment reflects a 29% probability of a 25-basis-point rate hike at the upcoming Federal Open Market Committee meeting on September 15–16, down from 35% the previous day and 51% earlier in the week.

Global markets remained largely stable. The Euro Stoxx 50 showed minimal movement, while China’s Shanghai Composite edged up +0.01%. Japan’s Nikkei 225 closed +0.59% higher.

Interest Rates

September 10-year Treasury notes (ZNU6) fell by five ticks, pushing the yield up to 4.674%, an increase of 3.2 basis points. Despite weaker-than-expected economic data, yields climbed as investors expressed renewed concern over inflation dynamics. The 10-year breakeven inflation rate rose to 2.272%, up by 1.3 basis points.

Consumer inflation expectations remain elevated, with respondents to the University of Michigan survey predicting price increases of +4.3% over the next year, compared to +4.2% in July. Longer-term expectations held steady at +3.3%, well above the Federal Reserve’s 2% target.

The 30-year Treasury auction concluded with a yield of 5.216%, the highest level since 2001, reflecting investor demand for compensation amid widening federal deficits and uncertain monetary policy.

European sovereign yields also moved upward, with the German 10-year bund rising to 3.195% and the UK 10-year gilt reaching 5.016%.

U.S. Stock Movers

Among the Magnificent Seven, most names slipped, though losses were contained, led by Tesla (TSLA), down nearly -0.6%.

Semiconductor shares were mixed, with Broadcom (AVGO) and Applied Materials (AMAT) declining more than -4% despite Above-consensus guidance from Applied Materials. Conversely, AMD (AMD), Align Technologies (ALGN), and GlobalFoundries (GFS) gained more than +3%.

SanDisk (SNDK) jumped more than +7% after JPMorgan initiated coverage with an overweight rating following the company’s investor day presentation.

Drone-related stocks rallied after the Trump administration announced plans to impose a 100% tariff on imported drones and components. The Defiance Drone and Modern Warfare ETF (JEDI) rose +4%, with Unusual Machines (UMAC) jumping +26% and AeroVironment (AVAV) up +1%.

Reddit (RDDT) surged more than +13% after securing a spot in the S&P 500 ahead of the August 18 rebalance, set to replace AvalonBay Communities (AVB), which is exiting due to its merger with Equity Residential (EQR). The merged entity will continue trading under EQR’s listing as Vivmark.

Wayfair (W) climbed more than +2% after Bernstein upgraded the home goods retailer to “Outperform” from “Market Perform.”

Earnings Reports (8/14/2026)

Liberty Live Holdings (LLYVK).

On the date of publication,

Rich Asplund

did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.

For more information please view the Barchart Disclosure Policy

here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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