Market Update: Stocks Fall on Day, Rise for July

Stocks fell on Friday as sectors like Consumer Discretionary (NYSE: XLY) and Energy (NYSE: XLE) pulled down the broader market, while declines in Amazon (NASDAQ: AMZN) shares following its disappointing earnings report also led to declines. However, benchmarks posted a positive month as they closed out July.

The Nasdaq and Dow both added over 1% in July, while the S&P 500 gained over 2% for the month of July. Sectors like Utilities (NYSE: XLU), Health Care (NYSE: XLV), Real Estate (NYSE: XLRE) and Technology (NYSE: XLK) led monthly gains for the S&P 500, while Energy and Financials (NYSE: XLF) lagged as rising inflation and low interest rates pressured these sectors.

Here's how the market settled to close out the week:

S&P 500 Index (NYSE: SPY): -0.54% or -23.89 points to 4,395.26

Dow Jones Industrial Average (NYSE: DIA): -0.42% or -149.06 points to 34,935.47

Nasdaq Composite Index (NASDAQ: QQQ): -0.71% or -105.59 points to 14,672.68

Consumer sentiment declines in July on inflation concerns:

Consumer sentiment declined in July compared to June as consumers became discouraged by rising prices and concerns that inflation will continue to rise.

Consumer sentiment in July rose to 81.2 from 80.8 in the month's preliminary report, according to the University of Michigan's consumer sentiment report for July. However, sentiment fell by 5.0% from June's reading of 85.5%.

"Consumer sentiment edged upward at the end of July, although it still posted a monthly decline of 5.0%. The largest monthly declines remained concentrated in the outlook for the national economy and complaints about high prices for homes, vehicles, and household durables," said Richard Curtin, chief economist for Surveys of Consumers, in a press statement. "While most consumers still expect inflation to be transitory, there is growing evidence that an inflation storm is likely to develop on the not too distant horizon."

Core PCE inflation rise at faster rate in June year-over-year:

Core personal consumption expenditures (PCE) increased at a faster rate year-over-year in June compared to May, signalling rising price pressures as demand increases amid the U.S. economy's recovery.

Core PCE rose by 3.5% in June, according to the Bureau of Economic Analysis' new report published Friday, climbing from May's rate of 3.4%. However, June's rate was less than the 3.7% consensus economists had expected.

Month-over-month, core PCE declerated, increasing by 0.4% in June compared to May's 0.5% rise.

Personal income rates unexpectedly rise in June:

Personal income rates unexpectedly rose in June after declining in May, as many employers increased compensations to incentivize workers back into the labor market as the economy continues to recovery from the coronavirus pandemic. The moves made by employers more than offset decreases in government stimulus-related income.

Personal income rose 0.1% in June month-over-month, according to the Bureau of Economic Analysis' (BEA) monthly report published Friday. Consensus economists were expecting a 0.3% decline for the month, with personal incomes falling by 2.2% in May.

"The estimate for June personal income and outlays reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic," the BEA said in a press statement. "Government social benefits associated with pandemic-related assistance programs declined in June."

Personal spending also increased by a more-than-expected rate in June, rising by 0.1%. The personal savings rate also declined to its lowest level since Feb. 2020, dropping to 9.4% from May's 10.3%, reflecting more consumer confidence in the economy.

Here's how the market opened Friday:

S&P 500 Index: -0.59% or -26.07 points to 4,393.08

Dow Jones Industrial Average: -0.15% or -53.47 points to 3,031.06

Nasdaq Composite Index: -0.91% or -132.96 points to 14,643.46