Wall Street Ends August Higher Despite Tech Weakness, Fed Cuts Eyed

Wall Street wrapped up August on a relatively quiet note Friday, with tech stocks dragging the market lower but overall monthly gains remaining intact.

The Dow fell 92 points, or 0.2%, while the S&P 500 slipped 0.64% and the Nasdaq dropped 1.15%. Despite the dip, all three indexes closed August with strong gains: the Dow up 3.2%, the S&P 500 up 1.91%, and the Nasdaq up 1.58%. It marked the fourth straight month of gains for the Dow and S&P, and the fifth in a row for the Nasdaq.

Investors have been buoyed in recent months by easing trade tensions, strong corporate earnings, and growing expectations that the Federal Reserve could cut interest rates as soon as September. Still, momentum in artificial intelligence stocks has cooled. Dell and Marvell Technology both tumbled after weaker-than-expected earnings reports, while Nvidia slipped 3.36%, ending its winning streak since March.

“Expectations for tech are sky high,” said Jay Hatfield, CEO of Infrastructure Capital Advisors. Analysts at Citi echoed that outlook, noting that while earnings were solid, growth forecasts for AI have slowed.

Meanwhile, inflation data released Friday showed the Personal Consumption Expenditures (PCE) index rose 2.6% year-over-year in July, while the Fed’s preferred core PCE measure rose 2.9%. Both were in line with forecasts.

Despite the cooling in tech, stocks remain near record highs. The S&P 500 closed above 6,500 points this week for the first time, marking its 20th record high of 2025. History suggests that when the index posts that many records by August, it typically finishes the year higher.

Gold also jumped 1.2% on Friday, finishing August up 5% as investors sought safety amid uncertainty.

Still, September could bring challenges. Historically, it has been the weakest month for stocks, with the S&P averaging a 0.7% decline over the past 75 years. Analysts say a pullback may be overdue, but could also provide buying opportunities.

Traders now look ahead to key jobs data due September 5 and the next Consumer Price Index report on September 11, both of which could influence the Fed’s rate decision.

Explore: NBCPalmSprings.com, where we are connecting the Valley.