Stocks Latest Market News: July PCE Inflation Data Sends Shockwaves Through Equities
Estimated reading time: 4 minutes
- Persistent inflation fueled market sell-off
- July PCE data confirms ongoing inflationary pressures
- Major indices react negatively, with tech stocks hit hard
- Volatility increases, reflecting investor anxiety
- Mega-cap stocks outperform small-caps
Contents
- Stocks Latest Market News: July PCE Inflation Data Sends Shockwaves Through Equities
- Persistent Inflation Concerns Trigger Market Sell-Off
- Immediate Market Reaction
- Market Volatility and Treasury Yields
- Sector Performance
- Monthly Market Summary
- What to Watch Next
- CTA
Persistent Inflation Concerns Trigger Market Sell-Off
The release of July US Personal Consumption Expenditures (PCE) inflation data on August 29, 2025, at 12:30 p.m. UTC (8:30 a.m. ET), sent shockwaves through the US stock market. The report, which is the Federal Reserve’s preferred inflation gauge, revealed that core PCE rose 2.9% year-over-year, matching analysts’ consensus but confirming persistent inflationary pressures. Trading Economics This unexpected persistence of inflation, despite previous expectations of a slowdown, fueled concerns about the Federal Reserve’s future monetary policy decisions and triggered a broad-based sell-off across major equity indices. The reaction involved key players like the Federal Reserve, major US technology companies, and global equity investors. Charles Schwab Trading Economics
Immediate Market Reaction
The immediate market reaction was swift and decisive. The S&P 500 (SPX), despite closing the month with gains, ended Friday down 0.6% at 6,460, reflecting the post-PCE anxieties despite a brief period of positive movement earlier. Trading Economics Charles Schwab The tech-heavy Nasdaq 100 (NDX) experienced a more significant drop, falling 1.2%. The Dow Jones Industrial Average (DJIA) shed 92 points, or 0.2%. While precise data for the Russell 2000 (RUT) wasn’t explicitly available in the immediate aftermath, the prevailing trend of mega-caps outperforming small-caps suggests underperformance for the RUT. Trading Economics Mutual of America.
Market Volatility and Treasury Yields
The VIX volatility index, a key measure of market uncertainty, rose 0.76% to 14.53, indicating increased investor anxiety. Charles Schwab The 10-year US Treasury yield climbed to 4.23%, an increase of 0.03 percentage points, reflecting the market’s anticipation of potentially higher interest rates for longer periods. Charles Schwab
Sector Performance
Sector breadth painted a picture of uneven performance. Mega-cap stocks and those in the AI/technology sector led the decline. Nvidia (NVDA), a bellwether for the AI sector, fell 3.4%. Dell (DELL) experienced a sharp drop of 8.9%, likely reflecting concerns about the escalating costs associated with AI infrastructure. Caterpillar (CAT), a cyclical stock often viewed as a barometer of economic health, declined by 3.6%. Marvell (MRVL) suffered a significant 18.6% decrease, potentially related to revenue concerns or tariff issues. In contrast, Alibaba (BABA) surged 12.9% following a strong earnings report which highlighted the robust performance of its cloud computing segment. Trading Economics
Monthly Market Summary
Despite Friday’s market decline, it’s important to note that the S&P 500 and the Dow Jones Industrial Average ended the month of August with gains of 2% and 3%, respectively. The Nasdaq 100 marked its fifth consecutive month of gains, climbing 1% for the month. The US markets will be closed on Monday, September 1, 2025, in observance of Labor Day. Trading Economics
What to Watch Next:
- The market’s reaction to upcoming economic data releases, particularly further inflation indicators.
- Any statements or actions from the Federal Reserve regarding monetary policy in light of the persistent inflation.
- Further developments in the earnings season, particularly for key technology companies.
CTA
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