Stocks experienced a mixed day Friday, with the S&P 500 pulling back slightly from record highs. Investors were weighing disappointing economic data, including weaker consumer spending and sentiment, against a surprisingly strong earnings season. The softer economic indicators fueled expectations that the Federal Reserve will maintain current interest rates at its September meeting, a sentiment reinforced by recent cooling inflation and labor market data.

Futures traders now assign nearly a 70% chance of the Fed holding rates steady, an increase from the previous week. Despite this, concerns remain regarding the ongoing Middle East conflict and elevated oil prices, which could potentially hinder further stock market gains. Some analysts suggest that while rate hikes appear unlikely, rate cuts are also not imminent, potentially leading to a period of market consolidation.

For the week, the S&P 500 managed to secure its third consecutive weekly advance, rising by 0.4%. The Dow Jones Industrial Average, however, ended the week down 0.6%, while the Nasdaq Composite saw a modest gain of 0.1%. Treasury yields saw a slight increase, with the 10-year yield reaching 4.695%.