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Options traderMatthew Hefner works on the floor of the New York Stock Exchange, Monday, Aug. 18, 2025.

AP Photo/Richard Drew

Stocks pull back from their latest all-time highs on Wall Street

By The Canadian Press

Published 12:00 PDT, Fri August 29, 2025

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Stocks are losing ground on Wall Street in afternoon trading Friday, pulling the market down from its latest all-time highs, after a closely watched measure of inflation showed prices mostly held steady last month.

The S&P 500 was down 0.7 per cent a day after climbing to a record high. The benchmark index is set to end August up roughly 1.9 per cent, which would be its fourth straight month of gains.

The Dow Jones Industrial Average also came off its own record high, shedding 111 points, or 0.3 per cent, as of 2:39 p.m. Eastern time. The Nasdaq composite was 1.2 per cent lower.

Losses in technology weighed on the market, offsetting gains in health care and other sectors.

Dell Technologies slid 9.3 per cent for the biggest decline among S&P 500 stocks a day after the company reported second-quarter revenue that exceeded analysts' expectations, but noted that margin pressures and weakness in PC revenue.

Among other tech companies in the red: Tech giant Nvidia fell 3.4 per cent, Broadcom dropped 4.3 per cent and Oracle was 6.3 per cent lower.

The Commerce Department said prices rose 2.6 per cent in July compared with a year ago, as measured by the personal consumption expenditures index. That’s the same annual increase as in June and in line with what economists expected.

Still, excluding the volatile food and energy categories, prices rose 2.9 per cent last month from a year earlier, up from 2.8 per cent in June and the highest since February.

While inflation is much lower than the roughly 7 per cent peak it reached three years ago, it is still running noticeably above the Fed’s 2 per cent target.

Still, Federal Reserve Chair Jerome Powell signaled last week that the central bank may cut its key interest rate at its meeting next month, amid signs of sluggishness in the job market.

The most recent government data suggests hiring has slowed sharply since this spring.

“Today’s in-line PCE Price Index will keep the focus on the jobs market,” said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. “For now, the odds still favor a September cut.”

Lower rates can boost investment prices and the economy by making it cheaper for U.S. households and businesses to borrow, but they risk worsening inflation.

Traders see a roughly 87 per cent chance that the central bank will cut its benchmark interest rate next month by a quarter of a percentage point, according to data from CME Group.

Meanwhile, the latest reading in a survey of U.S. consumers by the University of Michigan showed sentiment soured this month. The final August reading is the lowest since May, reflecting heightened concerns about prices and the economy.

Treasury yields were mixed in the bond market. The yield on the 10-year Treasury rose to 4.22 per cent from 4.21 per cent late Wednesday. The yield on the two-year Treasury, which more closely tracks expectations for Federal Reserve action, slipped to 3.62 per cent from 3.63 per cent.

The Fed will get to review two more important inflation barometers before its next policy meeting, the producer price index and consumer price index. Unless those reports show a huge spike in inflation, the Fed is “almost guaranteed” to cut interest rates next month, said Chris Zaccarelli, chief investment officer for Northlight Asset Management.

Also weighing on the market Friday were Ulta Beauty and Marvell Technology.

Ulta fell 6.7 per cent despite posting second-quarter earnings and revenue that topped analysts' estimates, while Marvell slid 18.3 per cent after its third-quarter guidance fell short of what Wall Street was expecting.

Among the stocks bucking the broader market slide were Petco Health & Wellness and Autodesk. Both companies were coming off better-than-expected quarterly results. Petco jumped 22.6 per cent and Autodesk climbed 8.3 per cent.

European markets were mostly lower and Asian markets closed mixed.

U.S. markets will be closed on Monday for the Labor Day holiday.

– Alex Veiga, The Associated Press