The S&P 500 closed lower on Friday, dipping from a record high and weighed down by Applied Materials, while investors digested weaker-than-expected retail sales data.

Applied Materials fell 5.1% after its upbeat quarterly forecast failed to impress investors. The chip equipment maker’s shares have doubled in 2026 due to strong demand related to the buildout of AI data centres.

With investors nervous about high valuations of AI-related stocks, chipmakers also dropped on Friday, with Broadcom down 5.9% and Intel losing 2%.

“A lot of the drivers in the market right now are around various parts of AI and (Applied Materials) is an example of a company that had a ‘beat and raise’ but expectations were high and so the stock sold off,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta.

Transit through the Strait of Hormuz appeared at a near standstill after two more ships were attacked there and the United States said it could maintain a naval blockade of Iran indefinitely. Those developments added to pessimism after a senior Iranian source said on Wednesday there had been no progress in talks to build on a June agreement to end the war.

The S&P 500 energy index rallied 1.4%, tracking higher oil prices. Reddit surged almost 13% after the social media company was named a new addition to the S&P 500 index, effective August 18.