S&P500 and Nasdaq 100: US Stocks Retreat After Record Highs and PCE Forecast

S&P 500 Futures Slip from Record High as Traders React to Inflation Data and Profit-Taking Ahead of Long Weekend

U.S. stock futures edged lower early Friday as investors locked in gains following a record close for the S&P 500 and a strong earnings week, highlighted by Nvidia’s results. The latest inflation reading landed in line with expectations but reinforced concerns about sticky price pressures heading into September, a historically weak month for equities.

S&P 500 futures fell 0.3%, while Nasdaq 100 and Dow Jones futures both dropped around 0.4%. Thursday’s rally had pushed the S&P 500 above 6,500 for the first time, capping a strong August run with gains of 2.6% for the S&P, 2.8% for the Nasdaq, and 3.4% for the Dow.

Is Inflation Still a Risk for the Federal Reserve?

July’s core Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge, rose 2.9% year-over-year—matching forecasts but accelerating from June’s reading. The monthly rise in core PCE came in at 0.3%, also in line with estimates.

Headline PCE climbed 0.2% month-over-month and 2.6% annually. These numbers will likely keep rate cut expectations in check for now, with the Fed still cautious on inflation progress.

Nvidia Dips Again as Alibaba Unveils New AI Chip

Nvidia shares slipped about 1% in premarket trading after Alibaba was reported to be testing a more advanced homegrown AI chip. The move could reduce Chinese dependence on Nvidia, which is already limited in selling to the region. In contrast, Alibaba’s U.S.-listed stock rose more than 3.5%.

Caterpillar dropped nearly 3% after warning of a $1.5 billion to $1.8 billion tariff impact for the year. Dell slid 5% following weaker-than-expected forward guidance, despite beating on Q2 results.

Which Stocks Are Popping on Earnings?

SentinelOne gained 8% after it topped Q2 expectations and raised its full-year revenue guidance. Autodesk soared nearly 10% after strong earnings and a guidance raise. Affirm surged 15% on an EPS beat and strong revenue of $876 million. Ambarella jumped 18% on upbeat AI demand and a raised full-year revenue outlook.

Ulta Beauty also advanced 4% after lifting its full-year forecast. Meanwhile, Dollar Tree ticked up after an analyst upgrade, and Solana continued its crypto outperformance, rising over 7% this week.

What’s Next for Markets as September Nears?

With the S&P 500 now above 6,500, traders are bracing for a seasonally weak month. Historically, September averages a 0.7% decline for the index, according to The Stock Trader’s Almanac. Sticky inflation, China-U.S. tech tensions, and upcoming Fed commentary will remain key drivers heading into next week’s trade, especially with long weekend volume thinning market moves.

More Information in our Economic Calendar.