US stocks slipped on Friday as investors locked in profits ahead of the long weekend. The pullback came just days after the S&P 500 set a new record and Nvidia posted robust earnings. The market also had to digest fresh inflation data, reminding traders that price pressures remain a risk heading into September.
The S&P 500 closed 0.64% lower at 6,460.26, though it still posted a fourth straight monthly gain. The Nasdaq Composite fell 1.15% to 21,455.55, and the Dow Jones Industrial Average shed 92 points, or 0.20%, to finish at 45,544.88.
Inflation and the Fed outlook
Core PCE, the Federal Reserve’s preferred inflation gauge, rose 2.9% in July. That was in line with expectations but the fastest pace since February. Morgan Stanley Wealth Management strategist Ellen Zentner said the Fed remains open to rate cuts, but whether those materialise in September will depend on how labour-market data stacks up against persistent inflation risks.
August closes strong, September looms
Despite Friday’s weakness, August delivered solid returns. The Dow advanced more than 3% for the month, the S&P 500 gained nearly 2%, and the Nasdaq rose 1.6%. Yet history suggests caution. September has been the weakest month for US benchmarks since 1950, with the S&P 500 averaging a 0.7% decline.
Stock movers: Nvidia, Alibaba, Caterpillar
Nvidia fell more than 3% Friday, extending recent losses after a Wall Street Journal report that Alibaba had developed an advanced chip to counter restrictions on Nvidia’s sales in China. By contrast, Alibaba’s US-listed shares jumped 13%. Nvidia’s slide came even after the company reported 56% revenue growth for the prior quarter, underscoring investor sensitivity around China.
Tariff worries also weighed on sentiment. Caterpillar warned that new Trump administration tariffs could cut earnings by up to US$1.8bn this year, sending its stock down more than 3%. Retailer Gap echoed concerns, saying tariffs would pressure profits.
Australian outlook
Closer to home, the Australian sharemarket is set for a softer open on Monday. The SPI 200 futures point to a 0.3% fall. That follows a volatile reporting season but a strong August, when the index briefly cracked 9,000 for the first time before closing the month nearly 3% higher.
Attention will turn to local GDP figures on Wednesday. Economists at NAB expect modest growth of 0.3% for the June quarter, while offshore focus will be on Friday’s US non-farm payrolls report, seen as critical for the Fed’s rate path.
