US close: Dow Jones falls short of record close

Major indices delivered a mixed performance on Friday after hotter-than-expected wholesale inflation numbers continued to weigh on stocks.

At the close, the Dow Jones Industrial Average was up 0.08% at 44,946.12, while the S&P 500 shed 0.29% to 6,449.80 and the Nasdaq Composite saw out the session 0.40% softer at 21,622.98.

The Dow closed 34.86 points higher on Friday, reversing modest losses recorded in the previous session as the strongest rise in wholesale prices in three years limited upside for stocks.

Markets flatlined on Thursday after hopes for an imminent interest-rate cut propelled indices to record highs the previous session. However, major indices still managed to eke out solid weekly gains, with the Dow Jones just falling short of its first record close of the year.

US retail sales were in focus on Friday after rising as expected in July, according to advance figures from the Census Bureau, up 0.5% last month, extending June's 0.6% rebound. Excluding autos, core retail sales increased by 0.3%, also in line with expectations, suggesting a slight moderation in discretionary spending last month. On an annualised basis, total sales were up 5.9%, buoyed by back-to-school purchases and extended summer discounting.

July's retail sales figures come as market participants increasingly price in a September rate cut from the Federal Reserve, with softer inflation readings and a cooling labour market supporting the case for monetary easing. However, signs of spending fatigue and cautious consumer behaviour, particularly among lower-income households, continue to temper the outlook.

Elsewhere on the macro front, the New York Empire State manufacturing index increased to 11.9 in August, the highest reading since November 2024, up from 5.5 in July and ahead of market expectations of 0, pointing to a strong pickup in manufacturing activity. Both new orders and shipments increased, while delivery times lengthened sharply and supply availability slipped. At the same time, inventories fell after last month's expansion.

On another note, US capacity utilisation slipped to 77.5% in July from a revised 77.7% in June, according to the Federal Reserve, in line with market expectations for a reading of 77.5%, while industrial production rose by 1.4% year-on-year, the most since January, extending the previous month's upwardly revised 0.8% uptick.

Still on data, US consumer sentiment declined for the first time in four months in August, according to a preliminary reading from the University of Michigan, falling to 58.6 from 61.7 in July — well below consensus forecasts of 62. The drop was principally due to renewed concerns over inflation and a sharp deterioration in buying conditions for durable goods.

Finally, US business inventories increased 0.20% in June, according to the Census Bureau.

In the corporate space, Intel shares were in the green after Bloomberg said the Trump administration was reportedly in discussions to take a stake in the tech giant.

Reporting by Iain Gilbert at Sharecast.com