Traders on the New York Stock Exchange saw stocks dip on Friday as investors opted to cash in ahead of a long weekend. This pullback followed a record-setting week for the S&P 500 and optimistic earnings from Nvidia. Data released on inflation indicated that rising prices remain a significant concern as the market transitions into September.
The S&P 500 fell by 0.7%, but it’s still poised for its fourth consecutive month of gains. The Nasdaq Composite experienced a steeper decline, shedding 1.2%, while the Dow Jones Industrial Average dropped 106 points, or 0.2%. The core Personal Consumption Expenditures (PCE) index, a critical inflation gauge favored by the Federal Reserve, increased by 2.9% in July. This figure met expectations but marked an acceleration from the previous month, hitting its highest level since February.
Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, indicated that the Fed’s potential for interest rate cuts hinges on the balance between labor-market weakness and inflation risks. “The Fed opened the door to rate cuts, but the size of that opening is going to depend on whether labor-market weakness continues to look like a bigger risk than rising inflation,” she noted. With the PCE index aligning with forecasts, attention will likely shift to the jobs market, keeping the odds in favor of a rate cut in September.
Ross Mayfield from Baird emphasized that Friday’s market drop was more reflective of recent trends rather than the PCE print. “The PCE number was fine, but there’s a bit of an earnings overhang and maybe just a little profit-taking after hitting an all-time high,” he commented in an interview with CNBC. Despite Friday’s losses, the major indexes are set to conclude August on a high note, with the Dow rising approximately 3%, the S&P 500 up nearly 2%, and the Nasdaq enjoying over 1% gains.
Historically, markets have hit peaks leading into September, a month notorious for downturns. According to The Stock Trader’s Almanac, September is the S&P 500’s largest losing month since 1950. The index has averaged a 0.7% decline in September over the past decade, raising caution among investors as they navigate the market’s headwinds.
Among the notable performers on Friday was Nvidia, which dropped 3% amid reports that Chinese e-commerce giant Alibaba is developing a rival chip to address gaps left by Nvidia amid its challenges in selling products in China. Meanwhile, shares of Alibaba rose by 12%. Despite seeing a slight dip on Thursday, Nvidia previously reported a robust 56% revenue growth for the last quarter, reinforcing the optimism surrounding AI investments.
Concerns over tariffs also returned to the spotlight, with Caterpillar warning of a potential $1.5 billion to $1.8 billion loss this year due to President Trump’s tariffs, contributing to a 4% decline in its stock. Gap likewise indicated that tariffs would negatively impact profits, adding to the somber sentiment on Friday, as Mayfield pointed out.
As market participants absorb these developments, the outlook for September remains uncertain, with investors weighing both opportunities and risks in a fluctuating economic landscape.
Original Source: https://www.cnbc.com/2025/08/28/stock-market-today-live-updates-.html
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Publish Date: 2025-08-29 23:16:00
