Finance

American consumers unexpectedly pulled back on spending in July, leading to a 0.6% drop in retail sales, according to the Commerce Department. The decline marked the largest monthly contraction since May 2025 and contrasted sharply with a revised 0.2% gain in June. Spending pullbacks were most pronounced at online retailers, auto dealerships, and gasoline stations, sparking fresh concerns regarding consumer resilience amid persistent inflation.

A preliminary reading from the University of Michigan showed that U.S. consumer sentiment plunged by roughly 8% in early August to a level of 51. The decline ended a two-month recovery streak, driven primarily by ongoing anxieties over elevated living costs and eroded purchasing power. The survey highlighted particularly steep confidence drops among lower-income and older demographic groups who remain highly vulnerable to inflation.

Technology and chipmaker stocks faced downward pressure as the high valuations of artificial intelligence companies continue to stoke market nervousness. Applied Materials saw its shares drop 5.1% despite delivering a quarterly report that beat consensus revenue and profit expectations. Other major industry players also slid, with Broadcom and Intel dropping 5.9% and 2% respectively during the Friday session.