US Futures Steady Near Record Highs; Retail Sales and Consumer Sentiment Set the Tone for August 14

US equity futures were little changed on Friday as investors paused near record highs. The S&P 500 and Nasdaq Composite advanced on August 13, supported by technology, real estate and other rate-sensitive shares. However, Cisco's sharp decline and Applied Materials' post-market pullback showed that expectations for artificial-intelligence-related companies remain exceptionally demanding.

The August 14 focus shifts to July US retail sales, the preliminary University of Michigan consumer-sentiment survey and inflation expectations. A combination of moderate consumption growth and stable inflation expectations would likely be the most equity-friendly outcome. An unusually strong or weak consumption reading could instead revive concerns about higher interest rates or slower economic growth.

Data note: The August 14 US cash equity session had not opened when this report was prepared. Index figures below are official August 13 closes. Futures, commodities and after-hours prices are delayed indications available during the August 14 Asian session, not final August 14 closing prices.

Market Overview

Market and futures quotes: Yahoo Finance—S&P 500, S&P 500 futures, Nasdaq-100 futures and US 10-year Treasury yield.

Macro and Market Context

1. Wall Street Extends Its Advance Near Record Highs

On August 13, the S&P 500 gained 0.65%, the Nasdaq Composite rose 0.81%, and the Dow added 0.13%. Technology strength and a decline in Treasury yields supported the broader market, while real estate shares benefited from an improved financing-rate backdrop. The Associated Press reported rounded gains of 0.7% for the S&P 500 and 0.8% for the Nasdaq, with the 10-year Treasury yield easing to roughly 4.65% from 4.68%. Associated Press market report

Leadership remained tilted toward large technology companies, but participation was not entirely narrow: real estate, financials and selected consumer-discretionary shares also advanced. That improves market breadth, although low volatility and elevated valuations leave the indexes vulnerable to profit-taking when new information disappoints.

2. CPI and PPI Cooled, but Inflation Has Not Fully Disappeared

The US Bureau of Labor Statistics reported that the July Consumer Price Index rose 0.1% month over month and 3.4% year over year. Core CPI, excluding food and energy, increased 0.2% monthly and 2.5% annually. Energy prices fell 1.5% during the month and were an important contributor to the softer headline reading. Bureau of Labor Statistics CPI release

The July Producer Price Index for final demand was unchanged on the month, while its annual increase slowed to 4.7% from 5.5% in June. Final-demand energy prices declined 3.1% and gasoline fell 5.7%. However, the index excluding food, energy and trade services still increased 0.4% monthly, indicating that underlying price pressure did not vanish across the board. Bureau of Labor Statistics PPI release

For equities, the direction of the data is moderately constructive, but the details still warrant caution. Lower energy prices reduced the headline measures, while core services and broader underlying inflation may continue to limit how quickly the Federal Reserve can turn more accommodative.

3. The Federal Reserve Held Rates Steady as Markets Trimmed Hike Bets

On July 29, the Federal Reserve maintained the federal-funds target range at 3.50% to 3.75%. Federal Reserve policy statement

Following the CPI and PPI releases, the Associated Press reported that the market-implied probability of a September rate increase fell to roughly 35%, from about 50% two days earlier. Associated Press market report That repricing helps explain the decline in Treasury yields and the strength in real estate and growth stocks, although the policy path remains highly dependent on upcoming consumption, wage and inflation readings.

4. August 14 Retail Sales and Consumer Sentiment Are the Main Events

The US Census Bureau is scheduled to release July retail sales at 8:30 a.m. Eastern Time. In June, retail and food-services sales totaled $768.6 billion, up 0.2% month over month and 6.7% year over year. Census Bureau release schedule and June retail-sales data

June business inventories and the preliminary August University of Michigan consumer-sentiment survey are due at 10:00 a.m. Eastern Time. US economic calendar The survey's one-year and longer-term inflation expectations may matter as much as the sentiment headline because they influence investors' assessment of Federal Reserve policy. University of Michigan Surveys of Consumers material

The potential market response is not as simple as “stronger is better”:

• Moderate growth with stable inflation expectations: The closest outcome to a soft-landing combination and generally the most supportive for equities.
• Retail sales materially above expectations: Positive for corporate revenue, but potentially negative for highly valued growth shares if yields and rate-hike probabilities rise.
• Retail sales materially below expectations: Could lower yields but intensify concern about household demand and economic growth.
• Higher consumer inflation expectations: Could be viewed negatively by bonds and technology shares even if the sentiment index improves.

5. The Dollar, Oil and Gold Showed Modest Moves

During the August 14 Asian session, the US Dollar Index was near 99.865, about 0.10% below its previous reading. WTI crude traded around $81.36 a barrel, Brent near $87.14, and gold around $4,374.80 an ounce. The limited moves suggested that cross-asset markets were also waiting for the US data.

Oil remains important for headline inflation, energy-sector earnings and consumers' disposable income. Brent fell approximately 2.1% to $87.07 on August 13, helping ease near-term inflation concern. Associated Press market report

Sector Highlights

Technology and AI: Leadership Remains Intact, but the Earnings Bar Is Higher

The Technology Select Sector SPDR Fund rose approximately 1.01% on August 13. Apple gained 1.00%, Microsoft 0.90%, Nvidia 0.54%, Alphabet 0.82%, Meta Platforms 2.78%, and Broadcom 0.43%. Amazon declined 0.80%.

Large technology stocks continued to attract capital, but merely beating forecasts may no longer be sufficient. Cisco dropped 8.40% despite results that exceeded expectations, as margin concerns and demanding AI expectations weighed on the shares. The reaction illustrates a central risk in the AI trade: valuations increasingly require strong revenue, margins, orders and forward guidance at the same time. Associated Press market report

Real Estate and Rate-Sensitive Shares: Lower Yields Provided Support

The Real Estate Select Sector SPDR Fund advanced about 1.42%. AvalonBay Communities rose 2.29%, while homebuilder D.R. Horton gained 2.78%. Lower Treasury yields reduce relative financing pressure on real-estate investment trusts and housing-related businesses, while making dividend yields more competitive.

Whether the move extends on August 14 will depend heavily on whether retail sales and consumer inflation expectations push the 10-year Treasury yield higher again.

Financials: Modest Gains While the Yield Curve Remains in Focus

The Financial Select Sector SPDR Fund gained approximately 0.59%. Strong household demand can support loan growth and credit quality, but if expectations for short-term interest rates rise while the yield curve remains compressed, banks' net-interest-margin outlook may not improve at the same pace. Financial stocks may therefore respond to a strong retail-sales report less straightforwardly than other cyclical sectors.

Consumer Discretionary: Tesla Advanced While Amazon Declined

The Consumer Discretionary Select Sector SPDR Fund rose around 0.48%. Tesla gained 3.80%, while Amazon fell 0.80%. July retail sales will directly influence expectations for household-spending resilience, retailer inventories and revenue prospects later in the year.

If sales growth reflects higher prices rather than stronger real volumes, investors may treat a seemingly firm headline cautiously. Motor vehicles, nonstore retailers and food-services components should provide more specific signals on consumer behavior.

Energy: Shares Were Nearly Flat as Oil Limited Momentum

The Energy Select Sector SPDR Fund gained only about 0.05%. The August 13 decline in crude prices prevented the sector from participating fully in the broader equity advance. Near-term direction remains sensitive to supply-demand expectations, geopolitical risk and the dollar.

Corporate Earnings Focus

Applied Materials: Strong Results and Guidance, but Shares Fell After Hours

Applied Materials reported record fiscal third-quarter revenue of $9.115 billion for the period ended July 26, up 25% year over year. Non-GAAP earnings were $3.50 per share, up 41%, and non-GAAP gross margin was 50.4%. The company guided fiscal fourth-quarter revenue to $10.25 billion, plus or minus $500 million, and non-GAAP earnings to $4.02 per share, plus or minus $0.20. It also raised its calendar-2026 Semiconductor Systems revenue outlook. Applied Materials official results

Despite the strong figures, delayed after-hours trading showed Applied Materials near $507.69, down about 5.0% from its regular-session close of $534.54. Yahoo Finance—AMAT

The move looks more like a valuation and positioning response under elevated expectations than proof of fundamental deterioration by itself. Investors may be assessing the durability of leading-edge logic and advanced-packaging demand, the scope for further margin expansion, and how much of the strong outlook was already reflected in the share price.

Cisco and Fossil: Relative Expectations Continued to Drive Stock Reactions

Cisco fell 8.40%, showing that margin and outlook concerns could overwhelm an earnings beat. Fossil gained approximately 5.88% after exceeding expectations. Associated Press market report The contrasting reactions underline that the market is responding more to results relative to embedded expectations than to absolute growth alone.

Stocks to Watch

Key Market Drivers

• Headline and component details in July US retail sales, including autos, food services and online retail
• University of Michigan consumer sentiment and one-year and long-term inflation expectations
• Whether the 10-year Treasury yield holds near the 4.60%–4.70% area
• Whether Applied Materials' after-hours decline spreads to semiconductors and AI hardware
• Profit-taking risk in large technology stocks amid high valuations and a low VIX
• Crude-oil prices and their effects on inflation expectations, energy shares and household spending power
• Repricing of expectations for the Federal Reserve's September decision

Short-Term Outlook

These levels are observation zones derived from recent price highs, lows and round-number areas. They are not price forecasts.

The near-term US equity trend remains constructive, but the August 14 data combination may determine whether the indexes break higher or enter a deeper consolidation near record territory. The most supportive outcome would be moderate consumption growth, contained inflation expectations and a stable long-term yield. If retail sales run hot and revive rate-hike expectations, technology could come under pressure while financials and selected cyclicals may hold up relatively better. If consumption weakens materially, yields could fall, but investors may rotate their attention from inflation risk back toward growth risk.