S&P 500 slips from record as AI valuation jitters and soft retail sales weigh

The S&P 500 slipped from its record Friday as AI valuation fears and a 0.6% July drop in retail sales — the biggest in over a year — weighed on sentiment, though tame inflation data left the benchmark and the Nasdaq with a third straight winning week. Applied Materials fell 5% despite a record quarter, Reddit jumped nearly 13% on news of its S&P 500 inclusion, and PayPal surged on reports it is in talks to sell to a Stripe-led consortium after rejecting a $60.50 bid. Berkshire also disclosed it added $17 billion of Alphabet, while Nvidia reportedly mulls a $3 billion investment in SoftBank's SB Energy tied to an OpenAI data-center project.

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S&P 500 slips from record on AI jitters and weak retail sales The benchmark pulled back from Thursday's record close after topping 7,800 intraday for the first time ever, as investors grew nervous about rich AI-related valuations and digested a weaker-than-expected retail sales report. The S&P 500 energy sector rallied 1.4% after ship attacks brought Strait of Hormuz traffic to a near standstill, lifting oil prices; tame CPI and PPI data still left the S&P 500 and Nasdaq with a third straight winning week. 1 2

July retail sales post biggest drop in over a year Commerce Department data showed U.S. retail sales fell 0.6% in July — the largest decline since May 2025 and a reversal from June's revised 0.2% gain — with gas stations down 0.9% and auto dealers down 1.8%. Coming on top of soft jobs data, the weak report stoked concerns that persistent inflation, rising gasoline prices and record credit-card debt are cooling the American consumer. 3

PayPal in talks to sell to Stripe-led group after rejecting $60.50 bid The Wall Street Journal reports PayPal is in active sale talks with a consortium led by Stripe and private equity firm Advent International, which offered $60.50 per share in July — valuing the company near $53 billion — only to be rejected as too low. PayPal closed Friday at roughly $61.67, above the rejected bid, as investors price in a sweeter offer; a deal could be announced in coming weeks and would create one of the world's largest online payment platforms. 4 5 6

Reddit surges 13% on news it will join the S&P 500 Reddit shares jumped 12.6% on Friday after S&P Dow Jones Indices said the online forum would be added to the S&P 500, effective August 18. Inclusion typically triggers buying from the trillions of dollars benchmarked to the index and reflects criteria such as market size and consistent profitability, a milestone since Reddit's 2024 IPO. 7 8

Applied Materials slides 5% despite record results and strong outlook The chip-equipment maker posted a record fiscal Q3 — revenue of $9.115 billion, up 25% year over year, and EPS of $3.50, beating estimates — and guided Q4 revenue to $10.25 billion, up 51%. Shares still fell 5.1% as investors, who had roughly doubled the stock in 2026, focused on flat margin guidance and a shrinking China revenue mix. 9 10

Berkshire adds $17 billion in Alphabet shares, now its third-largest holding Berkshire Hathaway's Q2 13F filing shows it owns nearly 106 million Alphabet shares worth about $36.6 billion — its biggest addition of the quarter — after buying $10 billion via a private placement and roughly $7 billion on the open market. Berkshire also boosted Delta Air Lines by 44%, to a stake of about $1.6 billion. 11

Nvidia mulls $3 billion SB Energy investment tied to OpenAI data centers The Information reports Nvidia is in talks to invest up to $3 billion in SB Energy, a SoftBank subsidiary building a planned Ohio data-center campus for OpenAI, as part of roughly $100 billion in credit support for the project. SB Energy, also backed by OpenAI, could go public as soon as next month and raise at least $5 billion. 12