SynopsisThe S&P 500's streak came to an end, falling from its peak as weaker retail sales suggested caution among consumers. Despite a strong outlook, Applied Materials saw its shares slump, dragging down AI-related stocks.

In contrast, rising oil prices helped lift the energy index. Reddit experienced a surge following news of its index inclusion.

AgenciesMemory ‌chip makers Sandisk ⁠and Micron ⁠Technology surged, while Broadcom and Meta Platforms also gained. The S&P 500 closed lower on Friday, dipping from a record high and weighed down by Applied Materials, while investors digested weaker-than-expected retail sales data.

Applied Materials fell 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, chipmakers including Broadcom and Intel also dropped on Friday." 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 rallied, tracking higher oil prices. Reddit surged after the social media company was named a new ⁠addition to the S&P 500 index, effective August 18.

2% gain in June, the Commerce Department's Census Bureau said. 16.

53. While inflation related to high oil prices remains a concern, recent economic data has investors mostly expecting the Federal Reserve to hold interest rates steady at its September meeting.

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. 5, according to economists polled by Reuters.

With the S&P 500 trading just below record highs, the index is valued at about 20 times expected earnings. That is up from about 19 at the end of July and below 22 at the start of 2026.