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US stocks dipped on Friday after Thursday's big rally, as traders took a breather after the latest data sparked a burst of optimism about the state of the economy.

Stocks jumped in the previous session after retail sales topped expectations and jobless claims came in lower than the prior week. The data, combined with the cooling consumer and producer inflation reading earlier in the week, instilled new confidence in markets about the likelihood of a soft landing.

On Friday, investors will be tuned into the latest consumer sentiment data from the University of Michigan set to be released an 10:00 a.m. ET. Markets are also digesting a drop in new housing starts, which tumbled 6.8% last month to the lowest level since the pandemic.

A dip in new supply slated to come to market will likely put further upward pressure on home prices, which are already elevated. Shelter costs were the largest driver of the most recent consumer price index reading.

"A slowdown in single family construction will crimp new supply for a market already struggling with low inventory. Housing prices will likely stay elevated despite a broader economic slowdown," Jeffrey Roach, chief economist at LPL Financial, said Friday. "However, we do expect mortgage rates to drop throughout this year as the Fed starts cutting rates."

While investors won't get a Fed policy update this month, markets will be closely watching next week's economic symposium at Jackson Hole, Wyoming. Chairman Jerome Powell is scheduled to deliver remarks next Friday.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Thursday:

Here's what else is happening:

In commodities, bonds, and crypto:

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