S&P 500 Hits Record High, Then Pulls Back as Fed Rate Hopes Rise

US stock markets retreated on Friday after a record-breaking week for the S&P 500. The benchmark index slipped 0.2% to 7,785.76, while the Nasdaq Composite declined 0.3% to 26,729.16. The Dow Jones Industrial Average dropped 107.58 points, or 0.2%, to 53,732.41.

The S&P 500 had reached an intraday record of 7,816.70 on Thursday, driven by subdued inflation readings and resilient corporate earnings. More than 90% of S&P 500 companies have now reported second-quarter results, with year-on-year earnings growth tracking around 50%, according to FactSet.

However, economic data provided a more cautious signal. US retail sales unexpectedly declined in July, while consumer confidence fell in August following improvements in June and July. This adds to the case for the Federal Reserve to keep interest rates unchanged.