S&P 500 Loses Ground Amid Weaker Retail Sales and Middle East Tensions
The S&P 500 index fell from its record high on Friday due to weaker-than-expected retail sales data and tensions in the Middle East. Applied Materials led the decline, down 5.5%, after its upbeat quarterly forecast failed to impress investors. The company's shares have doubled this year due to strong demand for AI-related equipment.
The Philadelphia SE Semiconductor index fell 1.2% as Broadcom dropped 6.8%. Investors are nervous about high valuations of AI-related stocks, which have soared in recent years. Thomas Martin, senior portfolio manager at GLOBALT Investments, said Applied Materials' 'beat and raise' did not meet expectations due to high investor hopes.
Meanwhile, transit through the Strait of Hormuz appeared at a near standstill after two more ships were attacked, adding to pessimism about the region's stability. The S&P 500 energy index rose 1.4% as oil prices increased. Reddit surged over 10% after being added to the S&P 500 index, effective August 18.