Wall Street slips from its record following the latest weak update on the US economy

NEW YORK (AP) — The U.S. stock market edged back from its all-time high Friday following the latest report on the economy to come in surprisingly weak, this time about how much shoppers are spending at retailers. Such data could keep interest rates low, which is something Wall Street loves, but it also raises the risk of a slowing economy when inflation is still high.

The S&P 500 slipped 0.2% from its record set the day before. The Dow Jones Industrial Average dipped 107 points, or 0.2%, and the Nasdaq composite sank 0.3%.

Stocks gave up modest gains from early in the morning after oil prices swung higher. The price for a barrel of Brent crude rose 1.7% to $88.52 as uncertainty continues about when the war with Iran will allow oil tankers to freely exit the Persian Gulf again.

Also raising uncertainty was a report showing shoppers spent less at U.S. retailers last month than the month before. That surprised economists, who were forecasting another month of growth.

On the bright side for financial markets, such a pullback in spending could take pressure off inflation. Inflation remains much higher than anyone would like, but reports earlier this week suggested the pace of increases in prices is decelerating.

If inflation keeps trending that way, it could encourage the Federal Reserve to hold off on hikes to interest rates. Higher rates would help keep a lid on inflation, but they do so by intentionally slowing the economy and making it more expensive for everyone to borrow money.

The downside of such data, including last week’s surprisingly weak report on the U.S. job market, is that they raise the risk of a slowing economy. The Fed has no good tool to fix both a stagnating economy and high inflation at the same time, which is why what’s called “stagflation” is seen as a worst-case scenario.

Some on Wall Street cautioned against overreacting to the weak data on U.S. retail sales, even if it was broad based. It could simply be a snap back after retail sales in earlier months were boosted by unusual factors such as big tax refunds, the World Cup and even an earlier Prime Day event at Amazon, according to Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute.

U.S. consumers nevertheless appear to be getting more discouraged about the economy. A preliminary survey by the University of Michigan suggested sentiment among them is weakening by more than economists expected.

The survey said drops occurred across the political spectrum and showed up particularly among older, lower-income and other groups who can be hurt most by inflation.

On Wall Street, Reddit jumped 12.6% after learning its stock will join the S&P 500 index on Tuesday. Many professional investors and funds closely track the index, either mimicking it or at least measuring their performance against it. That can push many to buy a stock automatically when it enters the index.

Applied Materials fell 5.1% even though the company, whose technology helps make semiconductors, reported stronger profit and revenue for the latest quarter than analysts expected. CEO Gary Dickerson said global hunger for artificial-intelligence technology helped it deliver another record quarter.

But its stock had already more than doubled this year and built expectations very high, which helped pressure the stock on Friday.

AI stocks in general have been swinging sharply on worries that their prices shot too high because of AI euphoria and that their strong growth in revenue may not be sustainable.

All told, the S&P 500 fell 13.23 points to 7,785.76. Despite the loss, it nevertheless closed out a third straight winning week, its longest such streak since a nine-week run that ended in May.

The Dow Jones Industrial Average dipped 107.58 to 53,732.41, and the Nasdaq composite sank 73.86 to 26,729.16.

In the bond market, Treasury yields ticked higher and followed the price of oil. The yield on the 10-year Treasury rose to 4.69% from 4.63% late Thursday.

In stock markets abroad, indexes were mixed in Europe and Asia.

London’s FTSE 100 slipped 0.2% after Nigel Farage regained the seat in Parliament he quit a month ago, beating trash-can wearing comic candidate Count Binface in a special election.

South Korea’s Kospi again had one of the world’s sharpest moves and jumped 2.4% for its third straight gain of at least that much. Seoul has been at the center of the world’s swings for AI stocks because its market is dominated by two tech giants, Samsung Electronics and SK Hynix.

AP Business Writers Michelle Chapman and Elaine Kurtenbach contributed to this report.

A general view shows the New York Stock Exchange, Friday, Aug. 7, 2026, in New York. (AP Photo/Yuki Iwamura)

Specialist Michael Pistillo works on the floor of the New York Stock Exchange, Wednesday, Aug.. 5, 2026, in New York. (AP Photo/Yuki Iwamura)

Trader Fred Demarco, right, and Specialist Michael Pistillo, left, work on the floor of the New York Stock Exchange, Friday, Aug. 7, 2026, in New York. (AP Photo/Yuki Iwamura)

Traders Daniel Kryger, right, and Aman Patel, left, work on the floor of the New York Stock Exchange, Friday, Aug. 7, 2026, in New York. (AP Photo/Yuki Iwamura)

A general view shows the New York Stock Exchange, Friday, Aug. 7, 2026, in New York. (AP Photo/Yuki Iwamura)

A person walks in front of an electronic stock chart board showing Japan's Nikkei index at a securities firm Thursday, Aug. 13, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A person walk in front of an electronic stock chart board showing Japan's Nikkei index at a securities firm Thursday, Aug. 13, 2026, in Tokyo. (AP Photo/Eugene Hoshiko)

A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, Aug. 14, 2026. (AP Photo/Ahn Young-joon)

Currency traders work at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, Aug. 14, 2026. (AP Photo/Ahn Young-joon)

A screen shows the Korea Composite Stock Price Index (KOSPI), SK Hynix and Samsung Electronics Co. stock price at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Friday, Aug. 14, 2026. (AP Photo/Ahn Young-joon)

CAIRO (AP) — Rescuers in Yemen pulled more bodies from the rubble Wednesday of a prison run by Iran-backed Houthi rebels that was hit in a deadly airstrike earlier this week, as an escalation between the rebels and a Saudi-led coalition threatened Yemen's fragile ceasefire.

The renewed fighting is also threatening global oil shipments as the Houthis target shipping and oil infrastructure that’s helping keep oil flowing through the Red Sea while the U.S.-Iran war has throttled shipments through the key Strait of Hormuz on the opposite side of the Arabian Peninsula.

The prison in Hazm, the Jawf provincial capital, collapsed on Monday when coalition strikes hit the area, killing at least 23 people, including the four whose bodies were found on Wednesday.

It wasn't immediately known how many people were in the prison at the time of the strikes, which also left seven injured.

Following the strike on Monday, the Houthis retaliated on Tuesday with attacks on southern Saudi cities. The coalition early Wednesday responded with more airstrikes, targeting Houthi military facilities in Jawf and Marib provinces.

Hassan Saboula, director of Jawf's civil defense agency, said a child was among the 23 killed on Monday and that rescue teams were still searching for seven missing from the attack.

The identities of those killed have yet to be determined, al-Masirah satellite news channel cited Saboula as saying. Among the seven injured was a woman who was visiting her husband, said Anees al-Asbahi, a spokesman for the Houthi-run health ministry.

In a statement Wednesday, Houthi military spokesman Brig. Gen. Yahya Saree claimed the prison strike was carried out by an F15-SA Saudi aircraft. He said the aircraft took off from King Khalid Air Base in Khamis Mushait, the kingdom's fifth-largest city, at 4:30 p.m. on Monday, hit the prison and returned to the base 15 minutes later.

The Saudi government didn’t immediately respond to a request for comment. The rebels said they targeted the base on Tuesday, as part of their strikes on several cities in southern Saudi Arabia.

Yemen plunged into civil war in 2014, when the Houthis descended from their northern stronghold and seized the capital, Sanaa, forcing the internationally recognized government to flee southward and then into exile in Saudi Arabia.

A Saudi-led coalition entered the Yemen war the following year in an attempt to restore the government. The war has killed at least 150,000 people, according to U.N. estimates, and at times pushed the country to the brink of famine.

The escalation between the rebels and the coalition started when the Houthis attempted in July to fly a plane from Tehran, Iran's capital, to Sanaa, the rebel-controlled Yemeni capital, challenging a decade-long air and naval blockade by the coalition. The coalition struck the runway in Sanaa, preventing the flight from landing.

The Houthis have since targeted Saudi Arabia and attacked Saudi shipping in the Red Sea. On Tuesday, they hit several Saudi oil facilities where some operations have since been temporarily suspended, according to the Saudi Energy Ministry.

Also, the rebels have been attacking Saudi-allied government forces on multiple fronts within Yemen. However, government forces turned the tide earlier this month, striking Houthi positions on the Red Sea, on Yemen’s western coast.

Before the Jawf prison strike, the violence in Yemen killed at least 194 people between Aug. 23 and Sept. 5, and wounded over 880, according to the World Health Organization. More than 21,000 people have been displaced.

The escalation shattered a four-year truce that had largely halted the fighting in the civil war.

People read a newspaper to follow the war news at a shop in Sanaa, Yemen, Tuesday, Sept. 8, 2026. (AP Photo/Osamah Abdulrahman)

FILE - A Houthi Shiite rebel mans a machine gun mounted on a military truck in Sanaa, Yemen, Monday, Oct. 20, 2014. (AP Photo/Hani Mohammed, File)