The S&P 500 index and the tech-heavy Nasdaq ended lower on Friday, with investors turning cautious after Federal Reserve Chair Kevin Warsh reiterated the central bank’s focus on fighting inflation, increasing prospects for a rate hike. Without confidence that inflation is heading clearly and with sufficient speed to the Fed’s 2% goal, the central bank would have “more work to do,” Warsh said in his first Jackson Hole speech.
Traders added to bets on a September rate hike after Warsh also said he felt recent inflation data did not suggest a change in trend. Traders are now split between a rate hike and a hold in September, as they were before inflation data this month painted a mixed picture. Warsh’s speech rounds out a busy week packed with results from corporate heavyweights such as NVDA.O NVDA.O and SalesforceCRM.N CRM.N , alongside a batch of fresh economic data.
Chip stocks were mixed, pulling back from the previous session’s rally sparked by Nvidia’s blockbuster forecast that signaled the AI-driven boom had further to run.
According to preliminary data, the S&P 500 .SPX .SPX lost 19.94 points, or 0.26%, to end at 7,711.05 points, while the Nasdaq Composite .IXIC .IXIC lost 140.79 points, or 0.53%, to 26,400.56. The Dow Jones Industrial Average .DJI .DJI fell 11.06 points, or 0.02%, to 53,558.38.
Market heavyweight Nvidia slipped. Marvell Technology MRVL.O MRVL.O tumbled on doubts over the timing of revenue from its AI chip agreement with Alphabet’s Google GOOGL.O GOOGL.O , even though Marvell boosted its 2027 revenue forecast.
Most megacap stocks were higher. Alphabet GOOGL.O GOOGL.O gained, making the S&P 500 communication services sector .SPLRCL .SPLRCL the biggest boost to the index. Apple AAPL.O AAPL.O also rose. Salesforce CRM.N CRM.N extended gains from the previous session, providing support to the Dow.
PayPal PYPL.O PYPL.O fell the day after Bloomberg News reported that a consortium of buyout firm Advent and payment processor Stripe had decided to abandon their pursuit of the payments firm. Gap’s GAP.N GAP.N shares advanced as the retailer named industry veteran Michael Francis as Old Navy’s new CEO and raised its annual profit forecast. Ulta Beauty ULTA.O ULTA.O fell after the cosmetics retailer’s comparable sales growth dropped in the second quarter.
Separately, the final reading of the University of Michigan’s consumer sentiment survey stood at 51.7, compared with estimates of 51, according to economists polled by Reuters.
Reporting by Purvi Agarwal and Niket Nishant in Bengaluru and Saeed Azhar in New York; Editing by Maju Samuel and David Gregorio.
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