The Mid-Day Buzz

Sophia Reyes · August 29, 2025 11:13 AM

August 29^th, 2025

Stocks Slip After Inflation Data Release

U.S. equities traded lower on Friday, with the tech-heavy Nasdaq lagging behind both the S&P 500 and the Dow Jones Industrial Average. Despite the pullback, the S&P 500 remains up about 1.9% for August, marking its fourth consecutive monthly gain. Year to date, the index has advanced roughly 9.8%, while the Nasdaq has climbed about 11.2%.

The Dow Jones Industrial Average (^DJI) fell around 0.3%, and the S&P 500 (^GSPC) lost about 0.8%. The tech-heavy Nasdaq Composite (^IXIC) led the retreat, down over 1.2%. Big Tech slumped, with Nvidia (NVDA) declining over 3% to end the week not long after releasing its highly anticipated earnings report.

July PCE data came in on target, though inflation remains above the Fed’s goal. Equities slipped, but expectations for a rate cut stay elevated. With markets heading into a holiday weekend, light trading could drive near-term moves.

Economic Takeaways:

• Treasury yields stayed within a narrow range, with the 10-year yield holding near 4.2%.
• Personal Consumption Expenditures (PCE) inflation—the Fed’s preferred measure—rose in July largely in line with expectations. Headline PCE inflation held steady at 2.6% year-over-year, while core PCE, which excludes food and energy, ticked up slightly to 2.9% from 2.8% last month.
• The University of Michigan’s consumer sentiment surveyreleased Friday showed year-ahead inflation expectations among Americans climbed to 4.8% in August, up from July’s reading of 4.5%. The headline consumer sentiment index came in at 58.2 for the month, down 5.7% from last month and 14.3% from a year ago.
• In his annual Jackson Hole address, Fed Chair Jerome Powell emphasized the delicate balancing act facing policymakers. While the Fed’s policy rate currently stands between 4.25% and 4.5%, Powell noted that inflation could drift higher in the near term even as the labor market begins to soften.
• Gold futures (GC=F) touched an intraday high of $3,515.80 per ounce Friday after July’s PCE inflation data reinforced expectations for a September Fed rate cut. Additional momentum came from tariff concerns, dollar weakness, and renewed political turbulence following President Trump’s attempted removal of Fed Governor Lisa Cook. The metal has advanced 4% over the past five sessions and is on pace for its strongest monthly gain in four months.
• Silver futures (SI=F) joined the rally, climbing 2.7% to $40.80 per ounce on Friday. The white metal has gained 7% over the past month, extending its outperformance alongside gold.

Why a Higher Core Inflation Reading Won’t Derail the Fed

The Federal Reserve’s preferred inflation measure edged higher in July, but economists say it’s unlikely to alter expectations for a September rate cut.

“Today’s in-line PCE Price Index will keep the spotlight on the labor market,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “For now, the odds still favor a September cut. But the size of that move will depend on whether labor-market weakness continues to outweigh the risk of higher inflation.”

While policymakers remain alert to potential inflationary pressures from tariffs, economists note that July’s increase in “core” prices was driven entirely by services. “That’s further evidence tariffs are having minimal impact on goods inflation,” said Harry Chambers, assistant economist at Capital Economics. He pointed out that core goods prices were flat for the month, while core services rose 0.36%—a move in line with the strength already seen in services CPI.

On the Move

• Nvidia (NVDA) ended Thursday little changed and slipped about 1% early Friday. The chipmaker beat consensus earnings, but data center revenue came in shy of Wall Street expectations. Shares briefly dropped 3% in Wednesday’s post-market before rebounding, with the broader tech sector ultimately finishing near the top of Thursday’s performance leaderboard.
• Marvell Technology (MRVL) tumbled nearly 14% pre-market despite a 69% year-over-year jump in data center revenue. Results were otherwise in line with forecasts, but shares—already down 30% this year—extended losses on the miss. Hormel Foods (HRL) sank more than 13% Thursday after posting weaker-than-expected adjusted earnings and warning that commodity inflation will weigh on results.
• Affirm (AFRM) surged 16% after delivering a 33% revenue gain that easily topped estimates. Autodesk (ADSK) rallied 10% pre-market on an earnings and revenue beat alongside raised guidance, while Alibaba (BABA) climbed 4.4% after earnings beat forecasts. Strength in BABA may also reflect reports of a new in-house AI chip. Ulta Beauty (ULTA) gained 3.6% after boosting its full-year outlook.
• Tesla (TSLA) fell just over 1% as European sales dropped 40% year-over-year in July—the seventh straight monthly decline. Caterpillar (CAT) slid 3% after warning tariffs could trim $1.5–$1.8 billion off 2025 earnings and push margins toward the low end of its range. Dell (DELL) dropped 6.3% despite beating estimates and raising its full-year outlook, as Q3 EPS guidance lagged consensus.
• Retail names struggled: Bath & Body Works (BBWI), Best Buy (BBY), and Dick’s Sporting Goods (DKS) all slipped post-earnings. Best Buy cited tariff risks, while Dick’s missed revenue guidance despite raising its outlook. Meanwhile, Petco (WOOF) jumped nearly 23% on an earnings beat and a raised full-year forecast, even as same-store sales slipped 1.4%.
• Alphabet (GOOGL) rose 2% and is now up nearly 28% over the past two months. Solid earnings and relative valuation strength among the “Magnificent Seven” continue to fuel investor interest, even amid regulatory overhang.
• Elsewhere, Bitcoin futures (/BTC) slid nearly 2% early Friday and are down 5.6% in August despite hitting record highs mid-month. Crypto-linked names Circle Internet Group (CRCL), MicroStrategy (MSTR), and Coinbase (COIN) also slipped about 1%.
• The Russell 2000 (RUT) is now up 7.5% this month, outpacing the broader market on renewed hopes for Fed rate cuts.

What’s Ahead

Next week will be a shorter trading week with the markets closed for Labor Day on Monday.

Investor anxiety over the Federal Reserve’s independence remains elevated following the attempted dismissal of Fed Governor Lisa Cook. While her participation in September’s FOMC meeting does not appear to be in jeopardy, the episode introduces new uncertainty ahead of next week’s Senate Banking Committee hearing for Stephen Miran, the president’s nominee to fill a Fed vacancy. The situation echoes an earlier clash this year when President Trump sought to remove FTC Commissioner Rebecca Slaughter.

September 1: U.S. markets closed for Labor Day holiday.
September 2: August ISM Manufacturing PMI^®, July construction spending, and expected earnings from Nio (NIO) and Signet Jewelers (SIG).
September 3: July Job Openings and Labor Turnover Survey (JOLTS), July factory orders, and expected earnings from Dollar Tree (DLTR), Macy’s (M), Campbell Soup (CPB), Salesforce (CRM), Hewlett Packard Enterprise (HPE), and American Eagle Outfitters (AEO).
September 4: August ADP Employment, August ISM Services PMI^®, and expected earnings from Ciena (CIEN), Broadcom (AVGO), and lululemon (LULU).
September 5: August Nonfarm Payrolls, August unemployment.