U.S. stocks retreated from record highs as Wall Street digested the latest news about consumer inflation, an update showing prices in July were higher than the Fed’s target.
The Dow Jones Industrial Average (^DJI) fell 0.2%, while the S&P 500 (^GSPC) lost 0.6%. Nasdaq's technology-heavy composite material (^i Toice) reduced the retreat rate by 1.1%. Big Tech failed, and NVIDIA (NVDA) fell by more than 3% after publishing its highly anticipated revenue report, ending the week.
After reaching a record high in August, the S&P 500 and Dow ended with 1.4% and 2% returns, marking the fourth straight month of earnings for those indexes. Nasdaq also rose 1.6% in August in its fifth straight month of victory.
The new administration’s data showed on Friday that the key measures of inflation were as stated earlier. The “core” personal consumption expenditure index was closely studied by the central bank, which grew 0.3% per month and 2.9% per year, higher than the Fed's 2% inflation target. Both figures meet economists’ expectations, although the annual rate marks the biggest growth since February.
Meanwhile, U.S. consumer sentiment has fallen for three months as consumers in a survey by the University of Michigan said they expect inflation to surge next year.
Friday’s data came after signs of a resilient economy that helped lift the S&P 500 and Dow Jones industrial averages to a new high on Thursday.
Betting on the bet that will lower interest rates at its September meeting is still riding on high Friday, while traders priced at 87% of their chances to cut a quarter of their chances after PCE reading.
Inflation data limits NVIDIA revenue and the whirlwind week of the market that President Trump has worked to expel federal government lieutenant governor Lisa Cook, which has taken a new turn. On Friday, a judge is expected to rule on Cook's bid for the temporary restraining order.
Despite Friday's stock pullback, the main index was the longest winning streak in a row for more than a year.
Nasdaq High-Tech composites are expected to hit a 2% bump in August, its fifth straight rise, the longest winning streak in nearly a year and a half. Among them, the S&P 500 and Dow Jones index are set for the fourth straight month to be expected to increase by 1.6% and 2%, respectively, the longest since September 2024.
The Russell 2000 (^RUT), which includes small-cap companies, had a trip of 6% in August, with a fourth monthly increase in the quarter, the longest winning streak in four years.