US stocks slip as weak retail sales deepen slowdown worries amid oil spike

Newyork,UPDATED: Aug 15, 2026 02:06 IST

US stocks slipped on Friday after a weaker-than-expected report on retail spending added to concerns about the economy, even as softer demand could help ease inflation pressures and keep interest rates lower for longer. The pullback came a day after the S&P 500 touched a record high.

The S&P 500 fell 0.2 per cent, while the Dow Jones Industrial Average dropped 107 points, or 0.2 per cent, and the Nasdaq composite lost 0.3 per cent. Markets also turned lower after oil prices rose, adding another layer of uncertainty for investors.

Stocks gave up modest early gains after the price of Brent crude climbed 1.7 per cent to USD 88.52 a barrel. The rise came amid continued uncertainty over when the war with Iran will allow oil tankers to move freely out of the Persian Gulf again.

Another factor weighing on sentiment was data showing US shoppers spent less at retailers last month than in the previous month. Economists had expected spending to grow again.

For financial markets, weaker spending could help by reducing pressure on inflation. Inflation remains much higher than markets and policymakers would like, but reports earlier this week suggested price rises are slowing.

If that trend continues, it could encourage the Federal Reserve to pause further interest rate increases. Higher rates can help restrain inflation, but they also slow the economy deliberately and make borrowing more expensive.

At the same time, the weaker retail sales data, along with last week's softer-than-expected US jobs report, has raised the risk of an economic slowdown. The Fed has no easy way to tackle both weak growth and high inflation together, which is why stagflation is seen as a worst-case scenario.

Some on Wall Street urged caution in reading too much into the retail sales figures, even though the weakness was broad-based. Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute, said it may simply reflect a snapback after earlier months were lifted by unusual factors such as large tax refunds, the World Cup and an earlier Prime Day event at Amazon.

US consumers, however, appear to be growing more downbeat about the economy. A preliminary survey by the University of Michigan showed sentiment weakening by more than economists expected.

The survey said the fall in sentiment was seen across the political spectrum and was particularly noticeable among older and lower-income groups, as well as others most affected by inflation.

Among individual stocks, Reddit jumped 12.6 per cent after it was told its shares will join the S&P 500 index on Tuesday. Many professional investors and funds track the index closely, either by replicating it or measuring their own performance against it, which can lead to automatic buying when a stock is added.

Applied Materials fell 5.1 per cent despite reporting stronger profit and revenue for the latest quarter than analysts had expected. Chief executive Gary Dickerson said strong global demand for artificial intelligence technology helped the company deliver another record quarter.

Its shares, however, had already more than doubled this year, raising expectations sharply and putting pressure on the stock on Friday. AI-linked shares more broadly have been volatile amid worries that prices had risen too far on AI enthusiasm and that strong revenue growth may not last.

By the close, the S&P 500 was down 13.23 points at 7,785.76. Even so, it posted a third straight weekly gain, its longest winning run since a nine-week streak ended in May. The Dow Jones Industrial Average fell 107.58 to 53,732.41, while the Nasdaq composite lost 73.86 to 26,729.16.

In the bond market, Treasury yields moved higher alongside oil prices. The yield on the 10-year Treasury rose to 4.69 per cent from 4.63 per cent late on Thursday.

Markets in Europe and Asia were mixed. London's FTSE 100 slipped 0.2 per cent after Nigel Farage won back the parliamentary seat he had resigned from a month earlier, defeating comic candidate Count Binface, who campaigned wearing a dustbin.

In Asia, South Korea's Kospi was again among the world's biggest movers, rising 2.4 per cent for a third straight gain of at least that size. Seoul has been central to recent swings in AI-related shares because the market is dominated by Samsung Electronics and SK Hynix.

Overall, Friday's trading reflected the push and pull in markets between signs of easing inflation, worries about slower growth, rising oil prices and continued volatility in AI-linked stocks.

With PTI Inputs

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