S&P 500 closes lower as data and Middle East tensions weigh
Consumer data sparks concerns while energy stocks rise with oil prices.
1S&P 500 rally comes to an end
The benchmark U.S. stock index S&P 500 declined following weak retail sales data, dropping 0.8% to close below 4,250 points. Consumer spending caution signaled potential economic slowdown concerns, ending a 7-week uninterrupted rally. The index retreated from its previous record high, with technology and consumer discretionary sectors leading the losses. Analysts note this marks the sharpest single-day drop in three weeks.
2AI stocks under pressure
Semiconductor manufacturer Applied Materials saw its shares fall 3.2% despite strong earnings forecasts, dragging down other AI-related stocks. The tech sector index lost 1.5% during the session, with NVIDIA and AMD also closing lower. The selloff reflects growing investor caution about stretched valuations in the AI theme. Some analysts suggest this could be a healthy correction after months of outperformance.
3Energy sector gains on oil surge
Brent crude surpassed $85 per barrel amid escalating Middle East tensions, boosting energy stocks. ExxonMobil and Chevron gained over 2% each, making energy the best-performing S&P 500 sector with a 1.8% advance. The sector has now risen for five consecutive sessions. Geopolitical risks in the Strait of Hormuz continue to support oil prices, with some analysts predicting $90 oil if tensions worsen.
4Reddit surges on index inclusion
Reddit shares jumped 12% after news of its addition to the S&P MidCap 400 index, pushing its market value above $8 billion. The social media platform has gained over 45% since its 2026 IPO, with advertising revenue growth exceeding expectations. This marks Reddit's biggest single-day gain since March. The inclusion will force index funds to purchase approximately 5 million shares.
5Memory chip makers rally
Sandisk and Micron Technology surged more than 4% on expectations of semiconductor sector recovery. Growing demand for data storage solutions and predicted 10% price increases for memory chips next quarter boosted investor interest. Broadcom and Meta Platforms also posted strong gains. The Philadelphia Semiconductor Index rose 1.2%, recovering some of last week's losses.
6Consumer spending disappoints
U.S. retail sales grew just 0.2% in July, missing the 0.5% economist forecast. The weak data fueled speculation about faster Fed rate cuts, particularly as luxury goods demand showed notable softness. Amazon and Walmart shares declined on the news. Some analysts warn this could signal weakening consumer confidence ahead of the crucial holiday shopping season.
7Geopolitical risks rattle markets
Escalating tensions between Iran and Israel reduced risk appetite globally. Gold prices climbed above $1,950 per ounce, reaching three-month highs as investors sought safe havens. The flight to safety pushed U.S. Treasury yields lower. Oil price concerns dominated trading, with many fearing renewed inflationary pressures could delay central bank easing cycles.
8Critical week ahead for markets
Investors await Fed meeting minutes and key retail data due this week for clearer policy signals. Market participants seek clues about potential September rate moves. Technical analysts warn the S&P 500 must hold 4,200 support to avoid deeper correction. Volatility expectations have risen, with the VIX fear gauge climbing 15% during the session.
Original article: Economic Times — S&P 500 düşüşle kapandı: Veriler ve Ortadoğu gerilimi etkili oldu