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51m ago

Wall Street Pulls Back as Focus Turns to Nvidia and Inflation After Powell Signals Openness to Cuts

Traders see strong odds of a September rate reduction, but officials point to PCE and payrolls as decisive for any policy shift.

A dealer watches computer monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), left, the foreign exchange rate between U.S. dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ) at a dealing room of Hana Bank in Seoul, South Korea, Monday, Aug. 25, 2025. (AP Photo/Lee Jin-man)
U.S. dollar, Euro, Chinese Yuan, Canadian dollar, Turkish Lira and Pound banknotes are seen in this illustration taken May 4, 2025. REUTERS/Dado Ruvic/Illustration
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Overview

  • After a Friday surge that sent the Dow to a record and the S&P 500 near its peak, U.S. stocks slipped on Monday as last week’s momentum faded.
  • Market-implied odds for a quarter-point cut next month climbed to roughly 84% following Jerome Powell’s Jackson Hole remarks highlighting rising labor-market risks.
  • Treasury yields dropped Friday (10-year near 4.25% and two-year about 3.69%) and inched higher Monday as investors reassessed the path to easing.
  • Nvidia’s earnings due Wednesday are viewed as a key test for the AI-led rally, with Friday’s PCE inflation report and next week’s payrolls likely to sway rate expectations.
  • Chipmakers remained in focus after President Donald Trump said the U.S. will take roughly a 9.9%–10% stake in Intel, and investors are monitoring reports of a revenue-sharing arrangement tied to some Nvidia sales to China.