U.S. Stocks Pause After Record Gains as Inflation Concerns Resurface

Picture Credit: news.rthk.hk

U.S. stock markets eased on Friday, August 29, 2025, as investors digested fresh economic data following a week of record-breaking highs. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all touched all-time peaks earlier in the week, but today’s mood was more cautious.

The S&P 500 slipped 0.8% to 6,453.77, falling back from Thursday’s close above 6,500. The Nasdaq Composite led losses with a 1.3% drop, pressured by technology stocks, while the Dow Jones declined 202 points, or 0.5%. The S&P 500 ETF Trust (SPY) traded at $644.64, down 0.66%, with volume near 18.2 million shares.

Despite Friday’s pullback, all three benchmarks remain strongly positive for August: the Dow is up more than 3%, the S&P 500 nearly 2%, and the Nasdaq about 2%. That resilience comes as September looms, historically the weakest month for U.S. markets.

Tech stocks drove much of today’s weakness. Nvidia fell 2.9% on disappointing data-center revenue, while Marvell plunged 17% after reporting in-line results that failed to exceed lofty expectations. Palantir also slid, underscoring investor sensitivity to earnings guidance in high-growth sectors.

Picture Credit: independent.co.uk

Economic data added to the cautious tone. The core Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, rose 2.9% year-over-year in July, its fastest pace since February. Consumer sentiment also weakened, with the University of Michigan index slipping to 58.2 in August, while inflation expectations climbed.

Looking ahead, analysts expect heightened volatility as September approaches. Trade tensions, persistent inflation, and questions over the Federal Reserve’s rate-cut path are likely to drive market swings. Still, the broader uptrend, bolstered by AI-driven tech gains and the prospect of eventual monetary easing, suggests that for long-term investors, today’s pullback may be more of a breather than a reversal.