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3h ago

Tech-Led Selloff Caps Week as In-Line PCE Lifts Odds of September Fed Cut

Traders raised the probability of a rate cut to about 89% after the Fed’s preferred inflation gauge matched forecasts.

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Overview

  • U.S. stocks finished lower Friday, with the Dow down 0.20% to 45,544.88, the S&P 500 off 0.64% to 6,460.26, and the Nasdaq falling 1.15% to 21,455.55 as investors took profits.
  • July PCE inflation rose 0.2% month over month and 2.6% year over year, reinforcing futures pricing that points to roughly an 89% chance of a Federal Reserve cut next month, according to CME Group data.
  • Technology and chip shares led losses: the PHLX Semiconductor Index slid about 3.1%, Nvidia fell 3.34% after a Wall Street Journal report on an Alibaba high‑performance chip, and Marvell plunged 18.6% on weak guidance.
  • Despite the session’s dip, August closed higher for major indexes, with the Dow up 3.2%, the S&P 500 up 1.9%, and the Nasdaq up 1.58% for a fourth straight monthly gain.
  • Cross-asset moves were mixed as gold set a record near $3,473.70 per ounce, the 10‑year Treasury yield rebounded to 4.227%, Bitcoin slipped below $109,000, and Mexico’s S&P/BMV IPC fell 0.75% on the day to finish the week down 0.87% with the FTSE BIVA off 0.74%.