Stocks slip in cautious trading after weak US retail sales data

On Friday, US stock markets experienced a decline in cautious summer trading, driven by concerns over the Middle East conflict and the US economy. Following the S&P 500's record high on Thursday, most European indexes also closed lower. Weaker-than-expected US retail sales in July, dropping by 0.6% to $763.6 billion, sparked questions about the health of the world's largest economy.

Additionally, the University of Michigan's consumer sentiment survey revealed a significant drop in confidence by 8% in August, following two months of growth. This decline was particularly pronounced among older consumers, low-income households, and those without college degrees, who are most vulnerable to any decline in purchasing power due to inflation.

Despite this, Federal Reserve officials indicated that they would likely refrain from raising interest rates soon. However, analysts cautioned that investors should temper their expectations, as the US economy may still face challenges. While US petrol prices dropped in July, the relief was not accompanied by a surge in consumer spending.

Ongoing uncertainty surrounding the US-Iran conflict and the Federal Reserve's policy decisions dominated market attention. Tech companies and artificial intelligence-related investments continued to be central to market discussions, with Applied Materials' shares falling more than 5% despite strong earnings, and SanDisk rising 7.4% due to its positive outlook on AI growth. In Asia, technology stocks in South Korea rebounded, and Japan's tech sector also saw gains.