US stocks slip on softer retail sales growth and stretched AI valuations
US equity markets retreated as moderating retail sales growth and mounting scrutiny over artificial intelligence valuations prompted investors to reassess risk across technology and consumer sectors.
Wall Street’s major indices traded lower, driven by a combination of softer economic data and persistent anxiety over lofty technology valuations. In early trading, the tech-heavy Nasdaq Composite dropped 0.8 percent to 26,051.43, while the S&P 500 declined 0.4 percent to 7,543.96. The Dow Jones Industrial Average managed a slight 0.2 percent gain to 52,751.45.
Fresh economic data revealed that US retail sales increased by 0.2 percent in June, matching economist forecasts but slowing considerably from May’s revised 1.0 percent expansion. Analysts noted that declining gasoline prices likely suppressed the headline figure, indicating that underlying household spending remains resilient despite the moderation.
This macroeconomic backdrop follows benign June inflation data that briefly eased fears of aggressive Federal Reserve tightening. However, investors are now scrutinizing stretched valuations in artificial intelligence-linked equities. Semiconductor stocks faced broad selling pressure, with Nvidia falling 2.3 percent and Taiwan Semiconductor Manufacturing Company dropping 2.5 percent, even after reporting stronger-than-expected quarterly earnings.
The weakness extended to memory chip manufacturers. Western Digital and Seagate Technology both tumbled 7.3 percent, while Micron Technology shed 4.8 percent as the sector-wide selloff intensified.
Corporate earnings provided mixed signals for market participants. UnitedHealth Group surged 7.8 percent after raising its 2026 profit forecast, bolstering confidence in its forward outlook. Conversely, GE Aerospace fell 4.4 percent despite increasing its own 2026 profit guidance, as traders appeared to lock in gains.
Geopolitical tensions further influenced market dynamics. Crude oil prices climbed as intensifying strikes in the Middle East escalated the Iran war, raising concerns over global energy supplies. Brent crude futures rose 1.09 percent to $85.88 a barrel, and US West Texas Intermediate advanced 1.12 percent to $80.49.
The surge in fuel costs directly impacted transportation equities, with United Airlines slipping 2.8 percent on fears of higher third-quarter expenses. Meanwhile, precious metals retreated across the board as the 10-year Treasury yield edged up to 4.58 percent from 4.55 percent. Spot gold fell 1.5 percent to $4,001.17 per ounce, and spot silver dropped 2.8 percent to $56.17.
