Stock market today: S&P 500 closes lower, but posts second weekly win

Investing.com -- The S&P 500 notched  its second-weekly gain despite falling Friday amid pressure from weaker consumer sentiment data and a jump in inflation expectations.   

At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average traded 34 points, or 0.1%, higher, the S&P 500 index fell 0.3%, while the NASDAQ Composite fell 0.4%.

The S&P 500 and Nasdaq added around 0.9% and 0.8%, respectively. 

Economic data in spotlight

The preliminary University of Michigan’s Survey of Consumers for August showed overall sentiment fell to a reading of 58.6 in August from 61.7 in July, missing analysts’ forecasts of 62, as worries about tariff-induced inflation weighed. 

On the inflation front, the outlook for both the one- and five-year horizons both jumped to 4.9% and 3.9%, respectively, from 4.5% and 3.4% previously. 

The odds of September rate cut will mostly priced in, slipped to 86% from 92% the previous day, Investing.com’s Fed Rate Monitor Tools showed Friday, but the hot inflation expectations suggest that the depth of cuts could be limited. 

In other economic news, U.S. import prices rebounded in July, boosted by higher costs for consumer goods, the latest indication that inflation was poised to pick up because of tariffs.

Import prices increased 0.4% last month after a downwardly revised 0.1% dip in June, the Labor Department’s Bureau of Labor Statistics said on Friday.

“The Fed will be paying close attention to this, because if import prices don’t start falling soon then that will signal U.S. corporates are fully paying the tariff and then they have the choice of either passing it onto consumers, thus boosting inflation, or absorbing it in profit margins,” ING analysts said in a note.

U.S. retail sales also increased solidly in July, rising 0.5% last month after an upwardly revised 0.9% gain in June.

"The 0.5% m/m rise in retail sales in July, paired with the upward revision to May’s and June’s data, shows households continue to spend in healthy amounts despite the threat of tariffs – especially given the increase in sales in areas which have experienced tariff-induced price pressures recently," said analysts at Capital Economics, in a note.

That said, a softening labor market and higher goods prices could curb growth in consumer spending in the third quarter.

Trump and Putin to meet

Trump and Putin are set to hold talks in Alaska later in the session to try and negotiate an end to the war in Ukraine, their first face-to-face talks since Trump returned to the White House.

The conflict has raged for over three years, and has severely disrupted the global supply chain, resulting in inflated commodity prices and the associated hit to global economic growth. 

The U.S. president said earlier Friday that he would not negotiate on behalf of Ukraine in his meeting with Russian President Vladimir Putin and would let Kyiv decide whether to engage in territorial swaps with Russia.

Trump said his goal was to get the two sides to start a negotiation, with any territorial swaps to be addressed then.

"They’ll be discussed, but I’ve got to let Ukraine make that decision, and I think they’ll make a proper decision. But I’m not here to negotiate for Ukraine, I’m here to get them at a table," Trump told reporters aboard Air Force One.

Trump’s remarks are likely to offer some assurance to Ukraine, which is worried that the U.S.-Russia talks could freeze the conflict at Ukraine’s expense.

UnitedHealth receives popular backer

The vast majority of U.S. corporates have now reported their second-quarter earnings, and, according to FactSet data, over 80% of S&P 500 companies have reported a positive EPS surprise, with similar numbers having also reported a positive revenue surprise.

Elsewhere, Unitedhealth Group (NYSE:UNH) stock soared after Warren Buffett’s Berkshire Hathaway disclosed late Thursday a new investment in the company.

The health insurer had seen its popularity slump as it became a target for many Americans upset over the direction of the nation’s healthcare, with its share price dropping 46% since January. .

Berkshire also said it sold 20 million shares of iPhone maker Apple (NASDAQ:AAPL) in the second quarter, and cut back another major holding, Bank of America (NYSE:BAC).

It also boosted its bet on home builders, revealing a new stake in DR Horton (NYSE:DHI) and significantly larger stake in Lennar (NYSE:LEN).

Peter Nurse, Ayushman Ojha contributed to this article