But today, the mood is more cautious. Traders are digesting new economic data, particularly inflation figures, and reassessing their portfolios. Even strong gains over the past month aren’t enough to keep everyone fully confident when uncertainty is in the air.
Right now, the S&P 500 ETF Trust (SPY) is trading at $644.64, down roughly 0.66% from the previous session. Intraday swings have taken it as high as $648.48 and as low as $643.73, with trading volume hovering around 18.2 million shares.
How Are the Key Indexes Performing Today?
The S&P 500 dropped 0.8% to 6,453.77, retreating from Thursday’s record close above the 6,500 mark. The Nasdaq Composite slid 1.3%, while the Dow Jones Industrial Average lost 202 points, or 0.5%.
Despite Friday’s pullback, all three major indexes remain firmly positive for August: the Dow is up more than 3%, the S&P 500 nearly 2%, and the Nasdaq about 2%.
That momentum comes even as September looms — historically the worst month for U.S. markets since 1950, with the S&P 500 averaging a 0.7% decline, according to the Stock Trader’s Almanac. Strategists point to profit-taking as a key driver. “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,” said Ross Mayfield of Baird. Is the Dow Jones Holding Its Ground? The Dow opened lower this morning, reflecting the caution many investors feel amid fresh economic data. Trade policy concerns and ongoing discussions about tariffs are also keeping some market participants on edge. Even though the Dow remains near record territory, today’s trading shows that investors are not taking gains for granted.What’s Happening With the S&P 500? The S&P 500 dipped about 0.5% today, stepping back from the all-time highs it reached earlier in the week. Despite this pullback, the index is still positioned to close August with nearly a 2% gain, which would mark its fourth consecutive month of growth. For long-term investors, this is a sign that the market’s upward momentum remains intact, even if day-to-day swings are inevitable.Why Is the Nasdaq Struggling? Technology stocks are feeling more pressure than other sectors. Companies like Nvidia and Palantir are leading the declines.
Nvidia’s stock fell 2.9% after reporting disappointing data-center revenue, while Palantir also experienced a notable dip. These moves underline how sensitive tech stocks can be to short-term earnings performance, even when the broader market is stable.
What did the latest inflation data reveal?
The core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, rose 2.9% year-over-year in July.
That was in line with expectations but marked the fastest pace since February, up from June’s 2.6%. Headline PCE increased 2.6% from a year ago.
While still trending lower than last year’s peaks, the uptick reinforces the Fed’s dilemma: cut rates too quickly and risk reigniting inflation, or hold back and risk slowing growth further.
Morgan Stanley’s chief U.S. economist Ellen Zentner noted that the Fed’s rate-cut path will depend on whether labor-market weakness overtakes inflation as the bigger risk. Markets still expect a September rate cut, but the odds are narrowing.
Which stocks made the biggest moves today?
Nvidia (NVDA): Shares fell 3%, extending a two-day slide despite strong quarterly earnings showing 56% revenue growth. Pressure came after reports that Alibaba has developed an advanced AI chip to reduce reliance on Nvidia, lifting Alibaba’s U.S. shares 9%. Caterpillar (CAT): Dropped 4% after warning that Trump’s tariffs could cost the company up to $1.8 billion this year. Gap (GPS): Also flagged tariff-related profit pressures, adding to the day’s risk-off tone. Marvell Technology (MRVL): Sank 15% after issuing weak Q3 revenue guidance despite meeting Wall Street’s Q2 expectations. Ambarella (AMBA): Surged 15% on strong AI-driven demand and raised full-year revenue guidance. SentinelOne (S): Gained 8% after an earnings beat and upgraded revenue forecast.
How is consumer sentiment shifting?
The University of Michigan’s consumer sentiment index slipped to 58.2 in August, down 5.7% from July and 14% lower than a year ago.
Both near-term and long-term inflation expectations rose, with consumers now seeing prices rising 4.8% over the next year and 3.5% over five years.
Survey director Joanne Hsu noted that buying conditions for big-ticket items dropped to a one-year low as households worried about persistent inflation pressures.
What’s the outlook heading into September?
August is shaping up as another strong month for stocks, but history warns September could be more volatile. With tariff shocks hitting U.S. manufacturers, inflation running hotter than expected, and consumer confidence weakening, investors may see sharper swings ahead.
Still, the broader trend remains resilient. The AI-driven tech rally, anchored by Nvidia, Microsoft, and other heavyweights, continues to validate investor bets. Meanwhile, the prospect of Fed rate cuts later this year is keeping equity markets supported, even as the timeline grows less certain.
Which Sectors Are Most Affected Today?
Tech stocks, in particular, are feeling the squeeze. Marvell, a company riding the wave of AI-driven revenue growth, saw its stock drop 17% after its Q2 results came in as expected but did not exceed projections. Investors were hoping for more, and the market responded quickly to that disappointment.
Similarly, another tech company experienced a 10% drop in its stock price due to a modest Q3 earnings forecast, even after announcing increased AI server shipments. This shows that even positive business developments can be overshadowed by investor expectations and guidance for the coming quarters.
On the flip side, there are bright spots. A few companies reported a return to profitability and stronger revenue growth, with shares jumping as much as 22%. These gains indicate that while tech stocks are volatile, opportunities for significant upside remain, especially for firms demonstrating resilience and growth potential.
What Does This Mean for Investors Moving Forward?
Even with today’s pullback, the overall trend in the market remains positive. The S&P 500 is still on track for a strong month, highlighting that this is more of a pause than a reversal.
Investors should pay close attention to upcoming economic data and corporate earnings reports. These releases will help determine whether the market’s recent gains can be sustained or if further volatility is likely.
Inflation, in particular, will remain a key factor. Persistent price pressures and potential adjustments from the Federal Reserve could influence market behavior in the coming weeks. Those who stay informed and maintain a balanced perspective may find opportunities even in a cautious environment.
Key Takeaways: What Investors Should Know Today
Markets are pausing, not collapsing. Today’s dips are natural after a week of record highs. Tech stocks are sensitive. Earnings performance and guidance can cause significant swings. Inflation remains a concern. Core inflation and consumer spending trends are shaping investor sentiment. Long-term trends are still positive. Despite short-term volatility, indexes like the S&P 500 show sustained growth. Stay informed and selective. Upcoming economic reports and corporate earnings will be decisive for market direction.
FAQs:
Q1: Why are U.S. stocks pulling back today?
A1: Investors are reacting to fresh inflation data and cautious corporate earnings, causing short-term dips.
Q2: Is the market trend still positive?
A2: Yes, despite today’s pullback, indexes like the S&P 500 remain on track for gains and show overall growth.
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