US Stocks Retreat After Rate Hike Alert Eases; S&P Posts Third Weekly Gain Despite Friday Loss

US stocks ended lower on Friday (14th) as weaker-than-expected retail sales and consumer sentiment data reduced immediate pressure for a Federal Reserve rate hike, while investors took profits following a string of record highs in the S&P 500.

The S&P 500 declined 0.17% on the day but gained 0.4% for the week, marking its third consecutive weekly advance. The Nasdaq Composite fell 0.28% on Friday but edged up 0.1% for the week, also achieving a third straight weekly gain. The Dow Jones Industrial Average dropped 107.58 points, closing at 53,732.41, and lost 0.6% for the week.

Economic data signaled softness in the US economy. July retail sales unexpectedly fell 0.6%, the largest monthly drop since May 2025. August consumer confidence also declined, reversing the improvement seen in June and July. Markets are reassessing the strength of US consumer spending and the broader economic outlook.

According to CME Group data, futures traders now assign nearly a 70% probability to the Fed holding rates steady in September, up from 56% a week earlier.

Ongoing geopolitical tensions and disruptions in the Strait of Hormuz have pushed oil prices higher. President Trump claimed that the US blockade of Iranian ports has created a "steel wall" capable of securing this critical energy corridor.

Treasury Secretary Besent revealed that unprecedented economic isolation measures against Iran will be announced next week, aiming to pressure Tehran into concessions as the US-Iran conflict nears six months with peace talks stalled.

Major US indices on Friday (14th):

- Dow Jones Industrial Average: Down 107.58 points (-0.20%) at 53,732.41 - Nasdaq Composite: Down 73.86 points (-0.28%) at 26,729.16 - S&P 500: Down 13.23 points (-0.17%) at 7,785.76 - Philadelphia Semiconductor Index: Down 38.95 points (-0.31%) at 12,417.05 - NYSE FANG+ Index: Down 180.08 points (-0.96%) at 18,656.39

Key Stocks:

Most of the tech giants in the NYSE FANG+ Index closed lower. Meta (META-US) fell 0.86%; Apple (AAPL-US) rose 0.22%; Alphabet (GOOGL-US) declined 0.13%; Microsoft (MSFT-US) dropped 0.30%; Amazon (AMZN-US) fell 0.94%.

Semiconductor stocks were mixed. AMD (AMD-US) surged 6.50%; Broadcom (AVGO-US) plunged 5.94%; NVIDIA (NVDA-US) dipped 0.06%; Applied Materials (AMAT-US) fell 5.12%; Qualcomm (QCOM-US) rose 0.61%; Micron (MU-US) gained 2.30%.

Memory stocks continued to rise. Micron (MU-US) up 2.30%; Western Digital (WDC-US) up 4.41%; SanDisk (SNDK-US) soared 7.39%; Seagate Technology (STX-US) up 5.65%; SK Hynix ADR (SKHY-US) up 0.40%.

Taiwan-related ADRs mostly declined. TSMC ADR (TSM-US) down 0.96%; ASE ADR (ASX-US) down 0.25%; UMC ADR (UMC-US) down 1.19%; Chunghwa Telecom ADR (CHT-US) up 0.71%.

Company News:

Applied Materials (AMAT-US) missed high investor expectations with its Q2 results, closing down 5.12% at $507.18, with weekly losses exceeding 8%. Adjusted EPS was $3.50 on revenue of $9.12 billion. Semiconductor systems sales reached $7.04 billion, slightly above the FactSet consensus of $6.96 billion.

SanDisk (SNDK-US) surged 7.39% to $1,641.11 after JPMorgan analysts upgraded the stock from "Neutral" to "Overweight." Analysts highlighted SanDisk's "new business model," which uses long-term agreements to structurally improve margins and shift most of its business to long-term, high-margin, take-or-pay-like revenue streams, significantly reducing cyclical exposure.

Reddit (RDDT-US) soared 12.69% to $178.09 after S&P Dow Jones Indices announced it will add Reddit to the S&P 500 effective August 18, replacing AvalonBay Communities, which is merging with Equity Residential (EQR-US).

President Trump's announcement of new tariffs on foreign-made drones and components boosted US drone manufacturers. Unusual Machines (UMAC-US) jumped 25.04%, Red Cat (RCAT-US) rose 8.80%, and AeroVironment (AVAV-US) gained 1.78%.

Cisco Systems (CSCO-US) closed down 1.58% at $111.68, with weekly losses exceeding 9%. HSBC downgraded the network equipment maker from "Buy" to "Hold," cutting its price target from $137 to $120. Analyst Abhishek Shukla noted that other opportunities offer better value, and as Cisco's revenue growth slows sequentially from Q2 FY2027, valuation multiples may face pressure.

Wall Street Analysis:

Jay Hatfield, CEO of Infrastructure Capital Advisors, said relatively mild inflation data released on Wednesday and Thursday fueled the S&P's rally, while Friday's pullback may signal a consolidation phase as earnings season ends. This pattern could extend into late August and September.

FactSet data shows over 90% of S&P 500 companies have reported Q2 earnings, with aggregate profits up about 50% year-over-year. Hatfield estimates that if earnings growth holds, oil prices stay above $80 per barrel due to continued Strait of Hormuz disruptions, and the Fed holds rates steady, the S&P could reach 8,100 by year-end.

Chicago Fed President Austan Goolsbee said recent disinflation is encouraging but emphasized the need to monitor upcoming data to confirm that price increases are sustainably moving toward the Fed's 2% target.

Hatfield believes neither rate hikes nor cuts are likely in the near term. To reach his firm's 9,000-point target for the S&P, Fed rate cuts would still be needed; otherwise, the index may consolidate around 8,000.

Bret Kenwell, US Investment Analyst at eToro, cautioned against optimism based solely on reduced rate hike odds. If economic weakness is the price for avoiding a hike, it may not benefit markets. With corporate earnings remaining resilient and limited market reaction to rate concerns, the sustainability of US growth ultimately depends on stable consumer spending.

(All figures are current as of publication; actual prices may vary.)