NEW YORK – The S&P 500 closed lower on Aug 14, dipping from a record high and weighed down by Applied Materials, while investors digested weaker-than-expected retail sales data.
Applied Materials fell 5.1 per cent after its upbeat quarterly forecast failed to impress investors. The chip equipment maker’s shares have doubled in 2026 due to strong demand related to the buildout of AI data centres.
With investors nervous about high valuations of AI-related stocks, chipmakers also dropped on Aug 14, with Broadcom down 5.9 per cent and Intel losing 2 per cent.
“A lot of the drivers in the market right now are around various parts of AI, and (Applied Materials) is an example of a company that had a ‘beat and raise’ but expectations were high and so the stock sold off,” said Thomas Martin, senior portfolio manager at GLOBALT Investments in Atlanta.
Transit through the Strait of Hormuz appeared at a near standstill after two more ships were attacked there and the United States said it could maintain a naval blockade of Iran indefinitely.
Those developments added to pessimism after a senior Iranian source said on Aug 12 there had been no progress in talks to build on a June agreement to end the war.
The S&P 500 energy index rallied 1.4 per cent, tracking higher oil prices. Reddit surged almost 13 per cent after the social media company was named a new addition to the S&P 500 index, effective Aug 18.
July retail sales data came in weaker than expected, after an unrevised 0.2 per cent gain in June, the Commerce Department’s Census Bureau said.
The S&P 500 declined 0.17 per cent to end the session at 7,785.76 points.
The Nasdaq declined 0.28 per cent to 26,729.16 points, while the Dow Jones Industrial Average declined 0.2 per cent to 53,732.41 points.
Even as the S&P 500 retreated from its Aug 13 record high, advancing issues outnumbered falling ones by a 1.1-to-1 ratio.
The S&P 500 posted 15 new highs and one new low; the Nasdaq recorded 85 new highs and 65 new lows.
Volume on US exchanges was light, with 9.6 billion shares traded, compared to an average of 17.4 billion shares over the previous 20 sessions.
For the week, the S&P 500 gained 0.4 per cent and the Nasdaq added 0.1 per cent. Each posted its third consecutive weekly gain, their longest winning streak since early April, helped by strong quarterly earnings and reduced concerns about interest rate hikes.
While inflation related to high oil prices remains a concern, recent economic data has investors mostly expecting the Federal Reserve to hold interest rates steady at its September meeting.
Traders see a 67 per cent chance the Fed will keep rates unchanged at the September meeting, with a 33 per cent chance of a hike, according to CME’s FedWatch.
The University of Michigan’s preliminary consumer sentiment survey came in at 51 in August, below expectations of 54.5, according to economists polled by Reuters.
The aggregate earnings of S&P 500 companies have surged 52 per cent in the second quarter, with much of that gain coming from Amazon , Microsoft and other AI heavyweights, according to LSEG.
With the S&P 500 trading just below record highs, the index is valued at about 20 times expected earnings. That is up from about 19 at the end of July and below 22 at the start of 2026.
Workday dipped 3.8 per cent. The stock soared 18 per cent on Aug 13 after Reuters reported that private equity firm Silver Lake was in talks to acquire the software firm.
Shares of some drone makers gained after President Donald Trump said late on Aug 13 he would impose tariffs on imports of drones and their components. Red Cat rallied 8.8 per cent and Unusual Machines soared 25 per cent. REUTERS
