On Friday, August 29, 2025, leading U.S. stock market indices saw a downturn from their recently established high points. This shift occurred as market participants analyzed new economic indicators just before the extended Labor Day weekend. A notable factor contributing to this retreat was the release of the most recent Personal Consumption Expenditures (PCE) report. This crucial inflation metric, closely watched by the Federal Reserve, showed an unexpected rise in 'core' PCE inflation during July. Consequently, the S&P 500 and the Dow Jones Industrial Average experienced declines, while the Nasdaq, heavily weighted with technology companies, also lost ground. Amidst this broader market weakening, several prominent firms, especially in the technology and retail sectors, reported significant movements, reflecting diverse responses to current economic conditions and specific company performance.
The S&P 500 experienced a 0.6% drop, while the Dow Jones fell by 0.2% after both had reached record closing levels on Thursday. The Nasdaq, influenced by a weaker technology sector, saw a more pronounced decrease of 1.2%. This market adjustment was primarily triggered by the Personal Consumption Expenditures (PCE) report for July, which revealed an increase in 'core' inflation. This figure is a key measure for the Federal Reserve in assessing inflationary pressures and formulating monetary policy.
Among the companies, Dell Technologies saw its shares decline by 8.9%, marking the largest single-day loss within the S&P 500. Despite reporting robust second-quarter sales and profits, fueled by strong demand for artificial intelligence-related products, the company's forecast for third-quarter earnings per share fell short of market expectations, leading to investor concerns. Similarly, Ulta Beauty's stock dropped by 7.1%, reversing previous gains. Although the cosmetics retailer posted better-than-anticipated second-quarter results and raised its full-year revenue outlook, ongoing uncertainties surrounding potential tariff impacts weighed on its stock performance.
The broader enthusiasm for AI-related stocks, which had surged following robust earnings reports from companies like Nvidia, lost momentum during Friday's trading. Major players in the technology sector, such as Oracle, a leading enterprise software provider with significant investments in AI and cloud infrastructure, experienced a 5.9% dip in its share price. Additionally, Super Micro Computer, a key manufacturer of AI-focused servers, saw its stock decrease by 5.5%, indicating a cooling in the AI rally.
However, defying the general market trend, Autodesk, a prominent engineering and design software company, witnessed its shares climb by 9.1%, making it the top performer in the S&P 500. The company's second-quarter sales and adjusted profits surpassed expectations, and its full-year forecasts were raised. This positive performance was largely attributed to the strong demand for its design software, particularly from the burgeoning AI data center industry.
In other sectors, Cooper Cos., a medical device firm specializing in vision care and surgical products, saw its stock rise by 4.4%. This recovery helped mitigate some of the losses from the previous day, when the company's shares fell after it missed quarterly revenue estimates and lowered its full-year sales outlook. J.M. Smucker also showed resilience, with its stock gaining 3.6% after an earlier post-earnings slump. Despite reporting a loss for its fiscal first quarter and noting negative impacts from tariffs on its coffee business, the company indicated plans for additional price increases to manage rising costs associated with trade duties.
The day concluded with a collective reassessment by investors of various market segments, ranging from technology and retail to medical devices and consumer goods. The mixed performance highlighted the intricate interplay of macroeconomic factors, such as inflation data, and company-specific fundamentals, including earnings reports and future outlooks. This dynamic environment suggests ongoing volatility as the market navigates evolving economic landscapes and sector-specific challenges and opportunities.