Stocks Fall on Signs US Consumer Is Slowing Down: Markets Wrap

(Bloomberg) — Wall Street is ending the week with stocks falling as signs of a slowdown in the main engine of the economy overshadowed optimism around bets the Federal Reserve will stay on hold in September.

While declines in both consumer sentiment and retail sales would reduce fears of an imminent Fed hike, they would hardly bode well for Corporate America. The S&P 500 dropped from record highs. Short-dated Treasuries outperformed. The dollar touched its lowest since May. Oil edged up as the US threatened to impose multiple economic measures against Iran.

The University of Michigan’s preliminary August sentiment index slid to 51 in August. The median forecast from a Bloomberg survey of economists had projected 55. Meantime, retail sales fell in July by the most in more than a year.

“It was a troubling update on the overall health of the consumer,” said Ian Lyngen at BMO Capital Markets. “This will contribute to the case for a Fed pause next month.”

One poor month of spending doesn’t necessarily mean the economy is falling off a cliff, but it becomes harder to dismiss alongside disappointing jobs figures, according to Bret Kenwell at eToro. Combined with tame inflation data, it should ease pressure on the Fed to raise rates, he said.

“Still, investors should be careful what they wish for,” Kenwell noted. “Economic weakness is a steep price to pay to avoid a quarter-point hike. For the economy to stay resilient, consumers will need to do the same.”

The economy is highly dependent on consumer spending, so a big slowdown could end up hurting corporate profits and the stock market, according to Chris Zaccarelli at Northlight Asset Management.

“But in an environment where inflation can cool down and the Fed can keep rates on hold as a result of that, would be very good for this bull market,” he said.

Traders also continued to keep a close eye on the geopolitical developments. The US will soon announce unprecedented economic measures against Iran, Treasury Secretary Scott Bessent said.

“Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation on a country,” Bessent told Newsmax on Thursday. The move will be part of a “one-two punch” that includes the continued blockade of Iran’s ports, he added.

Corporate Highlights:

Tesla Inc. is planning to unveil a new roadster design with “flying” capabilities as soon as this month, the Information reported. SpaceX has completed a $60 billion acquisition of startup Cursor, a key part of Elon Musk’s bid to gain ground on rivals Anthropic PBC and OpenAI. Applied Materials Inc. gave a solid forecast that still underwhelmed investors, a sign of the lofty hopes surrounding a company that’s key to the AI boom. Reddit Inc. will join the S&P 500 next week as part of an off-cycle change. It replaces AvalonBay Communities Inc. Gemini Space Station Inc., the digital-asset platform led by the billionaires Tyler and Cameron Winklevoss that went public last year just before the crypto market tumbled from record highs, posted a fourth consecutive quarterly loss since the IPO. Tyson Foods Inc. is closing more beef plants as a prolonged cattle shortage continues to force the US beefpacking industry’s restructuring. Some of the main moves in markets:

Stocks

The S&P 500 fell 0.2% as of 12 p.m. New York time The Nasdaq 100 fell 0.4% The Dow Jones Industrial Average fell 0.3% The Stoxx Europe 600 fell 0.2% The MSCI World Index fell 0.1% Currencies

The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.5% to $1.1580 The British pound rose 0.5% to $1.3555 The Japanese yen rose 0.2% to 159.20 per dollar Cryptocurrencies

Bitcoin fell 0.6% to $62,956.49 Ether fell 0.2% to $1,880.7 Bonds

The yield on 10-year Treasuries advanced four basis points to 4.69% Germany’s 10-year yield advanced seven basis points to 3.20% Britain’s 10-year yield advanced eight basis points to 5.04% The yield on 2-year Treasuries was little changed at 4.15% The yield on 30-year Treasuries advanced six basis points to 5.27% Commodities

West Texas Intermediate crude rose 0.6% to $81.70 a barrel Spot gold rose 1% to $4,391.81 an ounce ©2026 Bloomberg L.P.