FX.co ★ US Stocks Retreat Following High PCE Inflation

On Friday, U.S. stocks experienced a downturn as recent economic indicators continued to highlight persistent inflationary pressures within the U.S. economy. This has cast uncertainty over the Federal Reserve's interest rate outlook. The S&P 500 and the Dow Jones Industrial Average both declined by 0.2% from their record highs reached the previous day, while significant pressure on the tech sector led to a 0.5% drop in the Nasdaq Composite. Notably, personal income and spending increased compared to the prior month, signaling a strong economy at the quarter's transition, coinciding with President Trump's moderation on tariff threats. Meanwhile, the core Personal Consumption Expenditures (PCE) price index, the Fed's preferred measure for underlying inflation, surged to an annual rate of 2.9%. Nvidia's stock fell by 2%, extending losses post-earnings, amid concerns of waning demand suggesting that investments in artificial intelligence companies might be overestimated. Likewise, shares of Dell, Super Micro Computer, and Marvell decreased between 2% and 16%, following negative projections in their earnings reports. Nonetheless, the three major indexes were on track to achieve gains ranging from 1.5% to 3% for the month of August.