U.S. Stockes Close Friday in Red
(MENAFN) US equities suffered widespread losses Friday following inflation metrics that underscored persistent pricing pressures as markets enter a pivotal month for monetary policy decisions.
Major indices retreated across the board, with the Dow Jones Industrial Average shedding 92.02 points to settle at 45,544.88, marking a 0.2 percent decline. The broader S&P 500 surrendered 41.6 points, closing at 6,460.26 for a 0.64 percent drop. Tech-heavy Nasdaq Composite bore the heaviest losses, plummeting 249.61 points or 1.15 percent to end at 21,455.55.
Sector performance revealed a mixed landscape, with six of eleven S&P 500 categories managing gains. Healthcare stocks dominated the winners, surging 0.73 percent, while consumer staples advanced 0.64 percent. Technology shares suffered the steepest losses at 1.63 percent, followed by consumer discretionary's 1.14 percent retreat.
Critical inflation data from the U.S. Commerce Department showed core personal consumption expenditures (PCE) price index—stripping out volatile food and energy costs—accelerated at a 2.9 percent seasonally adjusted annual pace in July. Monthly core PCE growth hit 0.3 percent, aligning precisely with analyst forecasts.
"The Fed opened the door to rate cuts, but the size of that opening is going to depend on whether labor-market weakness continues to look like a bigger risk than rising inflation," said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. "Today's in-line PCE Price Index will keep the focus on the jobs market. For now, the odds still favor a September cut."
Consumer sentiment deteriorated significantly, according to the University of Michigan (UM) Surveys of Consumers. The U.S. Consumer Sentiment Index plunged to 58.2 in August from July's 61.7, falling well short of the previous year's 67.9 reading. The Current Economic Conditions Index contracted to 61.7 from 68.0, while the Index of Consumer Expectations dropped to 55.9 from 57.7, reflecting broad-based confidence erosion.
"Although consumers no longer fear the catastrophic scenarios they anticipated in the wake of the April tariff announcements, they believe that the current trade environment continues to pose threats to the multiple facets of the economy," said economist Joanne Hsu, director of the UM's Surveys of Consumers.
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