Despite hitting fresh record highs midweek, U.S. equities lost steam by Friday, Aug. 29, as inflation indicators complicated the Federal Reserve’s path forward on interest rates.
The Core Personal Consumption Expenditures price index — the Federal Reserve’s preferred measure of underlying inflation — rose 2.9% year-over-year in July, the highest reading in five months.
Just a week earlier, Fed Chair Jerome Powell hinted that easing rates might soon be appropriate. But the new data reintroduces a layer of uncertainty into that timeline, especially as inflation remains above the Fed’s 2% target.
Adding to economic headwinds, the U.S. goods trade deficit surged to $103.6 billion in July, up $18.7 billion from June and well above Wall Street forecasts of $89.5 billion. This marks the largest gap since March, when the deficit hit a record $162 billion.
The worsening balance underscores concerns that President Donald Trump’s tariff policies may not be delivering the intended improvements to the trade balance.
Nvidia — the world’s largest publicly traded company — struggled to lift markets despite posting strong quarterly results.
The chipmaker topped Wall Street estimates on both revenue and earnings per share, but its forward guidance came in only modestly above expectations.
For investors used to blockbuster beats and aggressive outlooks from the AI bellwether that helped drive this year’s rally, the update fell short. Shares declined for a third straight week, extending the stock’s recent losing streak.
Data software company MongoDB and cloud-based data platform Snowflake were standout performers, rallying 40% and 20% respectively on the back of strong quarterly results and their growing relevance in the artificial intelligence landscape.
Cyclical sectors also extended gains, with Michigan-based automakers notching a positive August.
General Motors has climbed nearly 40% from its April lows, marking its second consecutive positive month. Ford booked a fourth straight monthly gain, while Stellantis rebounded after sinking to five-year lows in July.
Benzinga is a financial news and data company headquartered in Detroit.