Market Overview
The S&P 500 Index ($SPX) closed down 0.64% on Friday, while the Dow Jones Industrial Average ($DOWI) fell by 0.20% and the Nasdaq 100 Index ($IUXX) dropped by 1.22%. Additionally, September E-mini S&P futures (ESU25) decreased by 0.68%, and September E-mini Nasdaq futures (NQU25) fell by 1.31%.
Sector Performance
Stocks experienced a downturn due to weakness in the technology sector. Marvell Technology’s share price plummeted over 18% after its Q2 data center revenue fell short of expectations. Likewise, Dell Technologies’ stock dropped by more than 8% as it reported tighter profit margins on AI servers.
Economic Indicators
Losses were compounded after the August MNI Chicago PMI fell more than anticipated, and the University of Michigan’s consumer sentiment index for August was unexpectedly revised downward. Furthermore, inflation concerns persisted as the July core PCE price index, the Federal Reserve’s preferred measure, increased by the most in five months.
Positive Economic Signs
On a brighter note, U.S. consumer demand remained strong with July personal spending rising by 0.5%, the largest gain in four months, and personal income also increased by 0.4%. The University of Michigan’s inflation expectations were revised lower, while dovish comments from Fed officials bolstered stock sentiment by suggesting future rate cuts.
Federal Reserve Outlook
Fed Governor Christopher Waller expressed support for a 25 basis point rate cut in September, anticipating further cuts within the next few months. San Francisco Fed President Mary Daly echoed this sentiment, indicating it may soon be necessary to adjust policies to better align with the current economy.
Tariff Developments
In trade news, President Trump announced potential new tariffs on advanced technology and semiconductors in retaliation against digital service taxes imposed by other nations. He also expanded existing steel and aluminum tariffs, effective immediately, covering a wider range of consumer goods.
International Market Performance
Globally, stock markets had mixed results on Friday. The Euro Stoxx 50 fell to a two-week low, closing down 0.83%, while China’s Shanghai Composite gained 0.37%. Japan’s Nikkei 225 ended the day with a 0.26% decline.
