The U.S. stock market experienced a broad retreat on Friday, August 29, 2025, as major indexes pulled back from the record highs achieved earlier in the week. A slump in the technology sector, coupled with persistent inflation concerns and renewed tariff worries, weighed heavily on investor sentiment. Despite today's declines, all three major indexes remain on track to close August with solid monthly gains, marking the fourth consecutive month of positive performance for the S&P 500 and Dow Jones Industrial Average.
Major Market Indexes See Pullback
After a week that saw the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) close at all-time record highs on Thursday, the market took a breather today. The S&P 500 finished the day down approximately 0.7% to 0.8%, retreating from its record close above the 6,500 mark. The Nasdaq Composite (IXIC), heavily weighted towards technology, saw the steepest decline, dropping between 1.1% and 1.3%. The Dow Jones Industrial Average also closed lower, shedding around 0.4% to 0.5%.
Despite Friday's cautious mood, the major indexes are still poised for a strong August. The Dow is up more than 3% for the month, while the S&P 500 has climbed nearly 2%, and the Nasdaq Composite is up approximately 2%. This momentum comes even as September, historically a challenging month for U.S. markets, looms large.
Economic Data and Inflationary Pressures in Focus
Investors today were closely monitoring new economic data, particularly the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve's preferred measure of inflation. The data revealed that the headline PCE Price Index rose 2.6% year-over-year in July, remaining unchanged from the previous month and aligning with economists' estimates. However, the core PCE price index, which excludes volatile food and energy components, increased to a five-month high of 2.9% year-over-year in July, slightly above the Fed's 2% target.
Additional economic indicators released today painted a mixed picture. U.S. July personal spending rose 0.5% month-over-month, marking the most significant increase in four months and meeting expectations. Personal income also saw a 0.4% month-over-month rise, in line with forecasts. Conversely, the August MNI Chicago PMI unexpectedly fell to 41.5, indicating a contraction in manufacturing activity. The University of Michigan's August consumer sentiment index was also revised lower to 58.2, reflecting heightened concerns about prices and the broader economy.
Earlier in the week, positive news emerged regarding the U.S. economy, with the second-quarter Gross Domestic Product (GDP) growing at an annualized rate of 3.3%. This figure was an upward revision from the initial estimate of 3% and surpassed market expectations, contributing to the record highs seen on Thursday.
Key Company News and Stock Movers
The technology sector bore the brunt of today's selling pressure, with several prominent companies experiencing significant declines. AI chipmaker Nvidia (NVDA) saw its shares fall more than 3% to 3.8% today, extending yesterday's losses. This came after its quarterly earnings report, while strong, failed to surpass Wall Street's exceptionally high expectations, and cautious guidance on China sales weighed on sentiment.
Dell Technologies (DELL) tumbled nearly 10% to 8.5%, marking the biggest decline among S&P 500 stocks. The personal computer and server maker provided a disappointing profit outlook for the current quarter, offsetting better-than-expected revenue results, and reported tighter profit margins on AI servers. Similarly, fellow chip designer Marvell Technology (MRVL) plunged approximately 18% following a weaker-than-expected sales outlook and Q2 data center revenue that missed estimates. Other tech heavyweights like Broadcom (AVGO) declined about 4% to 4.3%, Tesla (TSLA) fell around 4%, Meta Platforms (META) was down 2%, and Amazon (AMZN) gave up 1%. Microsoft (MSFT) and Apple (AAPL) also saw slight declines.
On a brighter note, Autodesk (ADSK) climbed over 7% to 8% after reporting stronger-than-expected second-quarter net revenue and forecasting third-quarter revenue above consensus. Buy now, pay later provider Affirm (AFRM) surged 10% to 20% after swinging to a quarterly profit with better-than-estimated results and posting surging gross merchandise volume.
In other corporate news, Alphabet (GOOGL) ticked higher, with its YouTube TV service reaching a distribution renewal agreement with Fox just in time for the upcoming football season. Meanwhile, Caterpillar (CAT) was among the Dow decliners, as the company warned of ongoing tariff impacts, expecting 2025 net incremental tariffs to be around $1.3 billion to $1.5 billion.
Several companies also reported earnings today, primarily before market open. Alibaba Group Holding Limited (BABA) was a key focus, with its stock up over 13% today. Other companies that released earnings included Frontline Plc (FRO), Chagee Holdings Limited (CHA), and BRP Inc. (DOOO).
Upcoming Market Events and Federal Reserve Outlook
Looking ahead, the market will turn its attention to a series of crucial economic data releases next week that could significantly influence sentiment and policy expectations. The highlight will be the U.S. Non-Farm Payrolls report for August, scheduled for release next Friday, September 5th. This will be preceded by the ADP Employment Change report on Thursday.
Other important data points include the August ISM Manufacturing and Services PMIs (Institute for Supply Management Purchasing Managers' Indexes) early next week, which will provide insights into economic activity. The Federal Reserve's Beige Book, offering an anecdotal overview of regional economic conditions, is also due out next Wednesday.
The Federal Reserve's monetary policy remains a critical factor. Markets are currently pricing in an 89% chance for a 25-basis-point rate cut at the next FOMC meeting on September 16-17, with a 52% chance for a second 25-basis-point cut at the subsequent meeting on October 28-29. Fed Chair Jerome Powell's recent hints at a potential September rate cut at the Jackson Hole symposium have fueled these expectations.
Today's market action reflects a momentary pause in the recent rally, driven by a combination of profit-taking, sector-specific weakness, and ongoing macroeconomic concerns. As investors look towards September, the interplay between inflation data, corporate earnings, and the Federal Reserve's policy decisions will continue to shape the market's trajectory.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.