New York
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Tech stocks dragged the market lower on Friday and Wall Street wrapped up a wild summer on a relatively quiet note.
The Dow fell 92 points, or 0.2%. The broader S&P 500 fell 0.64%. The tech-heavy Nasdaq Composite slid 1.15%.
Despite the dip, the Dow, S&P and Nasdaq closed August with healthy gains of 3.2%, 1.91% and 1.58%, respectively.
The Dow and S&P 500 have posted four months of gains in a row, which is their best streak in roughly one year. The Nasdaq posted five months of gains in a row, its best streak since early 2024.
Stocks have rallied in recent months as trade tensions have settled, corporate earnings have come in better than expected and traders have ramped up bets that the Federal Reserve will cut interest rates in September.
Yet slowing momentum in the artificial intelligence trade has weighed on markets. Dell (DELL) and Marvell Technology (MRVL), a semiconductor company, on Friday fell 8.9% and 18.6%, respectively, after reporting earnings that did not impress Wall Street.
Nvidia (NVDA), the core of the AI trade, sank 3.36%. Nvidia posted its first losing month since March.
“Expectations for tech are sky high,” Jay Hatfield, chief executive at Infrastructure Capital Advisors, said. “The companies have done well, but not necessarily well enough to get them to move to the next level.”
“Earnings were strong, but AI-related growth outlooks showed deceleration,” analysts at Citi said in a note. “All in, stocks have not broken but have clearly lost some momentum. To be fair, the breakneck pace of gains off April lows couldn’t continue forever.”
Wall Street on Friday also digested the latest batch of inflation data. Stock had opened lower as data showed the Personal Consumption Expenditures index rose 2.6% year-over-year in July, in line with expectations.
The Federal Reserve’s preferred inflation gauge — a core measure of PCE that strips out volatile food and energy prices — rose 2.9% year-over-year in July. It’s the hottest annual pace since February but was also in line with expectations.
“Inflation is increasing ever so slightly, but right in line with forecasts,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in an email.
US stocks ended August on a subdued note, with relatively light trading volume ahead of the Labor Day weekend. But it’s been another wild month for markets.
Traders have braced a barrage of headlines, from a weaker-than-expected jobs report, to the implementation of President Donald Trump’s widespread tariffs, to his administration’s attempts to oust Federal Reserve Governor Lisa Cook.
And, through it all, stocks have continued to steadily rise, buoyed by hopes for Fed rate cuts, stronger-than-expected corporate earnings and slowing but stubborn confidence that an AI boom might reap big rewards for investors.
About 98% of the companies in the S&P 500 have reported second-quarter earnings, with 81% of those companies beating Wall Street’s earnings expectations, according to FactSet data.
“The US stock market is at an all-time high, thanks in part to rapid earnings growth and expectations for that to continue,” James Reilly, senior markets economist at Capital Economics, said in a note.
Fed Chair Jerome Powell delivered remarks at a central banking forum in Jackson Hole, Wyoming, last week that hinted potential rate cuts could be on the horizon.
While Powell’s remarks signaled concerns about a slowing labor market, investors and traders have been ecstatic about the potential for lower borrowing costs.
The Russell 2000, an index of smaller companies that are more sensitive to interest rates, soared 7% this month as investors adjusted to the prospect of rate cuts as soon as September. It was the index’s best month since November.
“History shows that’s the most sensitive place to getting a little bit of a boost if the Fed cuts,” said Simeon Hyman, global investment strategist at ProShares.
Meanwhile, Wall Street’s fear gauge, the CBOE Volatility Index, is trading near its lowest levels of the year, signaling relative calm and confidence in markets.
The S&P 500 on Thursday closed above 6,500 points for the first time ever. It was the benchmark index’s 20th record high this year.
Since World War II, whenever the S&P has notched 20 or more all-time highs by the end of August, the index was higher by the end of the year about 90% of the time, with an average gain of 5.5%, according to Sam Stovall, chief market strategist at CFRA Research.
Stocks’ ascent to fresh records come as the Trump administration ramps up its assault on the Fed. While uncertainty lingers about the the administration’s feud with Cook, it’s being deliberated by the courts and investors are awaiting more clarity about what might happen.
“The market is waiting and seeing how far this will go,” Rob Haworth, senior investment strategy director at US Bank Asset Management Group, said.
“We believe the subdued market response is a nod towards a potentially extended legal battle,” Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, said in a note. “Nevertheless, the dispute likely signals the potential for larger financial market movements to come.”
Gold, a haven during uncertainty, jumped roughly 1.2% on Friday. The yellow metal rose 5% this month and notched its best month since April.
Gold is also considered a hedge against inflation and can rise when investors expect the Fed to lower interest rates.
“With policy now the key driver, gold remains well supported heading into September,” said Joe Cavatoni, senior market strategist at the World Gold Council.
While stocks have floated near record highs, September could be a difficult month, according to Adam Turnquist, chief technical strategist at LPL Financial. Across the past 75 years, the S&P 500 has notched an average decline of 0.7% in September, “making it the worst performing month for stocks,” Turnquist said.
Scott Wren, senior global market strategist at Wells Fargo Investment Institute, said he’ll be looking to buy more stocks if there is a dip.
“We’re probably overdue for a pullback now, and I think that if we do get some sort of a pullback here, we’ll be looking to lean more into stocks,” Wren said. “We’re actually hoping that we get an opportunity to pick up some equities at lower prices.”
It will be another month jam-packed with economic data. Trading for the month will begin on Tuesday as markets are closed for Labor Day on September 1.
Wall Street will be watching jobs data for August, set to be released on September 5, in addition to Consumer Price Index data for August due on September 11.
