Stocks slip in cautious trading after weak US retail sales data

The stock market experienced a decline on Friday, with cautious trading due to weak US retail sales data and uncertainty surrounding the Middle East war. The S&P 500, which had recently set a new record high, fell into negative territory, and most European indexes also ended lower after a mixed performance in Asia. Weaker-than-expected US retail sales in July, down 0.6% from the previous month, raised questions about the health of the world's largest economy.

Consumer sentiment survey data from the University of Michigan revealed a significant drop in confidence by around eight percent in August, with vulnerable groups like older consumers, lower-income households, and those without a college degree feeling the impact of inflation. While the Federal Reserve remained cautious about raising interest rates, analysts warned that investors should consider the potential consequences of their desires.

Despite a slight easing in US petrol prices in July, the relief did not lead to increased spending elsewhere. The conflict between the US and Iran continued to dominate market concerns, alongside ongoing inflation issues. In the technology sector, Applied Materials' shares dropped more than 5% despite record quarterly sales of $9.1 billion, while SanDisk surged 7.4% following a positive investor presentation on its prospects in the artificial intelligence market.

In Asia, Seoul's stock market rose more than 2% on Friday, with chipmakers SK Hynix and Samsung recovering after a recent selloff. The Korean Kospi index had plummeted around 40% between its June high and an intra-day low on August 6 but had rebounded over 20% by Friday. Tokyo's market also saw gains, with tech giants Kioxia, Advantest, and Sony rebounding along with the investment firm SoftBank.