The US stock market traded close to record levels on Friday after the S&P 500 reached a new closing high. Investors assessed weaker retail sales, steady Treasury yields and renewed tension in the Middle East.

The S&P 500 hovered near the flatline, while the Nasdaq Composite slipped about 0.2%. The Dow Jones Industrial Average also traded with little change. All three stock market indexes opened the session with small moves.

S&P 500 Eyes Third Weekly Advance

The S&P 500 entered Friday on course for its third consecutive weekly gain. The index had added 0.5% during the week. Meanwhile, the Nasdaq had gained 0.2%, while the Dow had fallen 0.4%.

Thursday marked another record-setting session for the S&P 500. The benchmark crossed 7,800 for the first time and reached an intraday record of 7,816.70. It also secured its 27th record close of 2026.

Slower inflation supported stocks earlier in the week. Two inflation reports showed easing price pressures, lowering expectations for a Federal Reserve rate increase in September. Short-term Treasury yields moved lower after Friday’s retail sales report.

The 10-year Treasury yield rose slightly to 4.65%, compared with 4.63% on Thursday. Investors also considered weak employment data from the previous week when reviewing the outlook for interest rates.

Retail Sales Drop More Than Forecast

US retail sales fell 0.6% in July, according to Commerce Department data. Economists surveyed by Dow Jones had expected sales to increase by 0.1%.

Sales excluding vehicles declined 0.3%. Economists had forecast a 0.2% increase. Lower gasoline prices affected the monthly figure, though weakness also appeared across other retail categories.

The report pointed to softer household spending during July. Nevertheless, investors made few major changes to their stock positions after the release. The bond market also recorded limited movement.

Separate data showed that US business inventories stayed unchanged in June. Economists had expected a 0.1% rise. Wholesale inventories increased 0.2%, while stocks held by manufacturers edged 0.1% higher.

Retail inventories fell 0.2% during June. Business sales declined 1.1% after falling 2.1% in May. At June’s sales rate, companies needed 1.30 months to clear their inventories.

Reddit Jumps on S&P 500 Entry

Reddit shares rose more than 14% after S&P Dow Jones Indices announced the company’s addition to the S&P 500. Reddit will replace AvalonBay Communities before trading begins on August 18.

Index inclusion often creates demand from funds that track the S&P 500. Reddit recently reported second-quarter revenue of $805 million, representing a 61% increase from one year earlier.

Its global daily active unique users increased 18% to 130.3 million. International users grew 28%, while global average revenue per user increased 36%. Earnings reached $1.25 per share.

Reddit co-founder Steve Huffman linked the company’s advertising strategy to discussions within its online communities. “Forty percent of the conversations people are having organically on Reddit are more or less about what to buy,” Huffman said.

AI Stocks Deliver Uneven Moves

Memory and storage companies recorded strong gains as investors tracked demand from artificial intelligence services. Sandisk, Seagate Technology and Micron attracted renewed buying during the week.

JPMorgan upgraded Sandisk from neutral to overweight and set a $2,250 price target. Sandisk shares have climbed 544% in 2026. The bank linked its outlook to growing NAND storage demand from AI inference workloads.

NewStreet Research also upgraded Micron to buy and assigned a $1,250 price target. Micron closed Thursday at $949.83 after gaining 4% during the session.

Applied Materials moved in the opposite direction. Its shares fell more than 4% after the chip equipment company released quarterly results. Adjusted earnings reached $3.50 per share on revenue of $9.12 billion.

The semiconductor systems division generated $7.04 billion in sales. That figure narrowly exceeded the FactSet estimate of $6.96 billion. Still, the results did not match the expectations already reflected in the stock price.

Oil prices changed little after rising earlier following reports of an attack on a tanker leaving the Persian Gulf. Brent crude slipped 0.2% to $86.92 per barrel as traders monitored regional shipping conditions.

Overall, Wall Street remained near record highs despite weaker-than-expected July retail sales, as investors continued to assess interest-rate expectations and economic signals.

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