Wall Street closed lower on Friday, dragged down by health and tech stocks. Concerns around overvaluation of AI-related stocks kept investors nervous, while continued tension in the Middle East weighed on the markets. All three benchmark indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) lost 107.58 points, or 0.2%, to close at 53,732.41. Seventeen components of the 30-stock index ended in the negative territory, 12 ended in the positive, while one remained unchanged.
The tech-heavy Nasdaq Composite fell 73.86 points, or 0.3%, to close at 26,729.16.
The S&P 500 slid 13.23 points, or 0.2%, to close at 7,785.76. Five of the 11 broad sectors of the benchmark index closed in the red. The Health Care Select Sector SPDR (XLV), the Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select Sector SPDR (XLY) declined 0.6%, 0.4% and 0.4%, respectively, while the Energy Select Sector SPDR (XLE) advanced 1.4%.
The fear gauge CBOE Volatility Index (VIX) decreased 2.6% to 14.25. A total of 9.6 billion shares were traded on Friday, lower than the last 20-session average of 17.4 billion. Advancers outnumbered decliners by a 1.1-to-1 ratio on the S&P 500.
Oil Prices Rise as Iran Blockade Threatens Global Supply
Oil prices climbed on Friday as the United States threatened an indefinite naval blockade of Iran, heightening concerns over disruptions to Middle Eastern crude supplies. Brent crude rose 1.64% to $88.50 a barrel, while WTI crude gained 1.92% to $82.81.
Shipping traffic through the Strait of Hormuz fell below the monthly average amid competing U.S.-Iran claims over control of the waterway. Two Abu Dhabi National Oil Company vessels were also attacked while transiting the strait, further intensifying supply concerns.
AMAT Tumbles Despite Strong Results as AI Fears Resurface
Applied Materials, Inc.’s AMAT 5.1% plunge weighed on Wall Street on Aug. 14, 2026, becoming one of the S&P 500’s biggest decliners and putting pressure on semiconductor and technology shares. The selloff reflected elevated expectations surrounding AI-driven chip demand, with investors questioning whether the strength of the AI and semiconductor investment cycle can justify already-high valuations. Broadcom also fell sharply, while weakness across chip-equipment stocks added to the market’s cautious tone.
On Thursday, AMAT had reported third-quarter fiscal 2026 non-GAAP earnings of $3.50 per share, topping the Zacks Consensus Estimate of $3.38. The quarterly earnings figure also climbed 41% from $2.48 per share reported in the same period a year earlier. Revenues came in at $9.12 billion, exceeding the Zacks Consensus Estimate by 1.31%. The company’s quarterly top line increased 25% year over year from $7.3 billion. And yet, investors were not impressed.
The pressure from semiconductor stocks came as the broader market also retreated from record highs, as weaker-than-expected July retail sales and falling consumer sentiment also raised concerns about economic growth.
Consequently, Broadcom Inc. AVGO and Intel Corporation INTC slumped 5.9% and 2%, respectively. While INTC currently carries a Zacks Rank #3 (Hold), AVGO has a #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Weekly Roundup
For the week ended Aug. 14, the S&P 500 gained 0.4%, while the Nasdaq Composite advanced 0.1%, marking their third consecutive weekly gains. The Dow Jones Industrial Average, however, fell 0.6%, snapping a two-week winning streak. Stocks benefited from easing inflation concerns and hopes for a supportive Federal Reserve, although rising oil prices, weaker retail sales and renewed Middle East tensions limited gains.
Economic Data
Per the U.S. Census Bureau, retail sales for July decreased 0.6%, while the number for June remained unrevised at an increase of 0.2%.
The Census Bureau also reported that business inventories for June had come in unchanged, while the number for May was raised upto an increase 0.4% from the previously reported increase of 0.3%.
Per the University of Michigan, preliminary consumer sentiment for August fell to 51 after increasing to 55.2 in July.
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