US Stocks Retreat from Record Highs Amid Weak Economic Data

The US stock market fell back from its all-time high on Friday after a weak update on the economy. The S&P 500 slipped 0.2% and the Dow Jones Industrial Average was down 45 points, or 0.1%, with an hour remaining in trading.

The weakness came from a report showing shoppers spent less at US retailers last month than the previous month, which surprised economists who were forecasting another month of growth.

This could be good news for inflation, as it may take pressure off prices rising too quickly. However, it also raises the risk of a slowing economy when inflation is already high.

The Federal Reserve has no easy solution to fix both a stagnating economy and high inflation at the same time, which makes stagflation a worst-case scenario.