Stock Market Today - Nasdaq, S&P 500, Dow Retreat on Inflation and Tech Losses

Nasdaq, S&P 500, Dow Retreat After Inflation Data and Tech Losses

Wall Street closed Friday with a sharp pullback as major benchmarks unwound part of their recent gains. The Dow Jones Industrial Average (^DJI) slipped 159 points, or 0.35%, to 45,482.73. The S&P 500 (^GSPC) lost 44 points, down 0.67% to 6,458.19, while the Nasdaq Composite (^IXIC) fell 244 points, or 1.13%, to 21,460.84. The declines followed the release of July’s Personal Consumption Expenditures (PCE) data, which showed core inflation up 0.3% month-over-month and 2.9% year-over-year — the highest annual pace since February and well above the Fed’s 2% target. The numbers reinforced concerns that the Federal Reserve remains boxed in by persistent price pressures even as markets price in an 87–89% chance of a quarter-point cut at September’s FOMC meeting.

Tech Sector Drag: Nvidia, Marvell, Dell Pressure Nasdaq

The tech-heavy Nasdaq bore the brunt of selling as Nvidia (NVDA) fell 3.15% to $174.49. While its recent earnings showed 56% revenue growth, investors are focusing on slowing data center momentum and growing competition, particularly from Alibaba (BABA), which surged 11.47% to $133.29 after unveiling a new advanced AI chip. Marvell Technology (MRVL) cratered 16.7% to $64.32 after issuing weak guidance for Q3, citing “lumpiness” in cloud customer demand. Dell Technologies (DELL) also disappointed, sliding 10% after softer AI-related guidance offset otherwise solid top- and bottom-line results. The selloff underscored how fragile sentiment remains in AI-linked equities after months of overheated valuations.

Consumer Confidence and Inflation Expectations Weigh on Sentiment

Adding pressure, the University of Michigan’s consumer sentiment index dropped to 58.2 in August, a three-month low and 14% lower year-on-year. Inflation expectations spiked, with the one-year outlook climbing to 4.8% and five-year expectations rising to 3.5%. Buying conditions for durable goods sank to their weakest level in a year, highlighting how persistent price increases are dampening consumer spending power. Markets are therefore caught between optimism over Fed cuts and growing unease that sticky inflation will prevent aggressive easing.

Dow and S&P 500 Still Extend Monthly Gains Despite Friday’s Drop

Despite the selloff, all major benchmarks remain on track for strong August performance. The Nasdaq Composite (^IXIC) is still set for a 2% monthly gain, its fifth straight advance — the longest streak since March 2024. The S&P 500 (^GSPC) has advanced nearly 2% in August, while the Dow (^DJI) posted a 3% gain, marking four consecutive months of progress for both. The Russell 2000 (^RUT) small-cap index stands out with a 6% monthly jump to 2,360.72, its best four-month streak since 2021. Yet the historical warning looms: September has been the worst-performing month for the S&P, Dow, and Nasdaq since 1950, averaging a 0.7% decline.

Caterpillar Tariffs, Norway Divestment Hammer Industrials

Caterpillar (CAT) dropped 4.05% to $417.29 after warning that tariffs will cost between $1.5–1.8 billion this year, higher than its prior forecast. The company expects Q3 tariff costs of $600 million, up from a $500 million forecast. The hit comes as Norway’s $2 trillion sovereign wealth fund announced it sold all CAT shares due to ethical concerns tied to bulldozer sales in Israel. This double blow — escalating tariff exposure and reputational divestments — raises long-term risk for CAT’s international demand profile.

Corporate Movers: Celsius, Affirm, Ambarella, Autodesk, SentinelOne

Energy drink maker Celsius Holdings (CELH) jumped 5.3% to $62.83 after PepsiCo (PEP) boosted its stake from 5% to 11% through a $585 million deal, while also selling Celsius its Rockstar brand in the U.S. and Canada. Affirm Holdings (AFRM) surged 13.3% to $90.60 after swinging to a profit with revenue of $876 million versus expectations of $837 million. Ambarella (AMBA) soared 15.5% to $81.60 after guiding fiscal 2026 revenue to $379 million, above consensus. Autodesk (ADSK) climbed 10% after beating with Q2 EPS of $2.62 versus $2.45 estimates and issuing bullish guidance. SentinelOne (S) added 4.5% to $18.41 after a beat and raised revenue forecast to as high as $1.002 billion for the fiscal year.

Alibaba’s Chip Ambition Reshapes U.S.–China Tech Battle

Alibaba’s AI chip development marks Beijing’s strongest push yet to fill the void left by Nvidia (NVDA)’s export restrictions. Its new processor, built domestically rather than through Taiwan Semiconductor (TSMC, NYSE:TSM), signals China’s intent to reduce reliance on U.S. technology. With BABA stock up more than 3.5% premarket and ending the session with an 11% surge, the geopolitical tech divide is accelerating — reinforcing pressure on U.S. AI leaders. Nvidia’s client concentration risk, with nearly 40% of data center sales tied to just two customers, magnifies this vulnerability.

Trump Tariffs Reshape Trade Dynamics and Consumer Goods Costs

Markets are also digesting President Trump’s tariff overhaul. The end of the “de minimis” exemption subjects all imports above $100 to levies of 10–50%. Smaller businesses relying on duty-free shipments under the previous $800 threshold now face escalating costs. Gap (GPS) has already flagged profit pressure, and tariff costs have forced companies into price hikes or margin cuts. For multinationals like PepsiCo (PEP) and Caterpillar (CAT), the tariff regime compounds challenges at a time of heightened global supply chain fragility.

Commodities: Gold Near Records, Oil Drifts Lower, Bitcoin Slumps

Safe-haven demand lifted gold (GC=F) to $3,501.60 per ounce, up 0.79% on Friday, extending its second straight weekly gain. Traders eye Fed independence risks and tariff-driven inflation as reasons to favor bullion. Crude oil (CL=F) slipped to $64.09 per barrel, down 0.79%, on track for a monthly decline despite Middle East supply risks. Bitcoin (BTC-USD) slid 3.25% to $108,287, consolidating after its rally above $110,000 earlier in the month. The moves highlight diverging hedges: investors are rotating into gold while trimming riskier crypto exposure.

Political and Federal Reserve Drama: Lisa Cook vs. Trump

Political turmoil added to market unease. Fed Governor Lisa Cook filed for a temporary restraining order against President Trump, who is seeking her removal. Trump officials have also submitted criminal referrals alleging mortgage fraud tied to multiple loans. The legal battle injects uncertainty into Fed leadership at a sensitive time, with Governor Christopher Waller already signaling his support for September rate cuts and potentially positioning to succeed Jerome Powell as chair.

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