Dow, S&P 500, Nasdaq Slide on Inflation Worries

U.S. stocks retreated from record highs on Friday as Wall Street digested an update on consumer inflation showing prices rising further above the Federal Reserve’s target in July, Amalya Dubrovsky, Karen Friar, and Laura Bratton reported for Reuters.

After hitting record highs in August, the S&P 500 and Dow ended the month with gains of 1.4% and 2%, respectively. (Photo: NVIDIA Facebook) 

The Dow Jones Industrial Average fell about 0.2%, while the S&P 500 lost 0.6%. The tech-heavy Nasdaq Composite led the retreat, dropping more than 1.1%.

Big Tech slumped, with Nvidia declining over 3% to end the week after releasing its highly anticipated earnings report.

After hitting record highs in August, the S&P 500 and Dow ended the month with gains of 1.4% and 2%, respectively, marking the fourth straight month of gains for those indexes.

The Nasdaq also capped August with a 1.6% gain in its fifth consecutive winning month.

A key measure of inflation rose as expected in July, new government data showed.

The “core” Personal Consumption Expenditures index, closely tracked by the central bank, increased 0.3% on a monthly basis and 2.9% annually, above the Fed’s 2% target.

Both figures matched economists’ expectations, though the annual pace marked the sharpest rise since February. Meanwhile, U.S. consumer sentiment fell to a three-month low as respondents in a University of Michigan survey said they expect inflation to accelerate over the next year.