Traders work at the New York Stock Exchange on August 20, 2025.
NYSE
Stocks fell on Friday as investors took some money off the table into a long weekend following a new S&P 500 record and solid Nvidia earnings this week. New inflation data showed rising prices was still a risk heading into the new month.
The S&P 500 traded 0.2% lower, while the Nasdaq Composite shed 0.4%. The Dow Jones Industrial Average lost 103 points, or 0.4%.
Core PCE, a key inflation measure watched by the Federal Reserve which excludes the costs of food and energy, increased 2.9% in July, in-line with expectations but an acceleration from the prior month and the highest level since February.
“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,” said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. “Today’s in-line PCE Price Index will keep the focus on the jobs market. For now, the odds still favor a September cut.”
Nvidia shares extended their recent losses, falling about 2%, after the Wall Street Journal reported that Chinese e-ecommerce giant Alibaba has created a more advanced chip as it looks to fill the gap left by Nvidia running into issues around selling its chips in China. U.S. shares of Alibaba were up more than 2%.
Nvidia finished slightly lower on Thursday after reporting strong 56% revenue growth for the prior quarter and largely validating the AI trade for investors.
Additionally, Caterpillar shares lost nearly 3% after the company warned it could tat a $1.5 billion to $1.8 billion hit this year due to tariffs. Shares of Dell Technologies slipped almost 10% following a soft outlook for the current quarter.
Stocks are coming off a winning session, with the S&P 500 closing above the 6,500 mark for the first time. Thursday’s gains put the indexes on track to close out August with solid gains. The 30-stock Dow has logged a more than 3% advance in August, while the S&P 500 has tallied a more than 2% advance. The tech-heavy Nasdaq has also seen an August gain of more than 2%.
The market is hitting new highs into a long weekend and month that has historically been poor for major benchmarks. September was the biggest losing month for the S&P 500, Dow and Nasdaq since 1950, according to The Stock Trader’s Almanac. The S&P 500 averages a 0.7% decline for the month.
“Although September is typically the weakest month of the year on average, we don’t see anything on the horizon to knock this bull market off its path,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said. “If anything, if there is any volatility in September or October – which would be typical for this time of year – it will likely prove to be a great buying opportunity as we are setting up to rally into year end, especially if the Fed is cutting rates outside of a recession.”