Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, sees markets in a “digestion phase” following the election of Donald Trump as US president and says, “the bond market is going to call the tune” for at least the next year.
Bloomberg
U.S. stocks closed lower on Aug. 29 but ended the month with gains, after the Federal Reserve’s preferred inflation gauge inched up, as expected, and consumers remained resilient last month despite tariffs.
The personal consumption expenditures price index, or PCE index, in July rose 2.6% on an annual basis, matching economists’ forecasts. The annual core rate, excluding the volatile energy and food sectors, rose 2.9%. That is up 0.1 percentage point from June and the highest annual rate since February but also in line with forecasts.
“The rise in core PCE prices in July was entirely due to a rise in core services prices and is further evidence that tariffs are having minimal impact on goods prices,” said Harry Chambers, assistant economist at research firm Capital Economics.
“The most encouraging news in today’s report is monthly spending and income rebounded,” said Heather Long,chief economist at Navy Federal Credit Union. “In fact, monthly spending was higher than income for the first time since March. This is an encouraging sign that American consumers are still willing to open their wallets when they see deals. There was a large rebound in spending on cars and motor vehicle parts.”
The blue-chip Dow ended down 0.2%, or 92.02 points, to 45,544.88; the broad S&P 500 fell 0.64%, or 41.6 points, to 6,460.26 and the tech-laden Nasdaq dropped 1.15%, or 249.606 points, to 21,455.552. The benchmark 10-year Treasury yield rose to 4.234%.
Despite the losses, all three indexes rose in August. The Dow rose to record highs this month and ended August about 3% higher while the S&P 500 gained nearly 2% after breaching 6,500 for the first time ever this week and scoring its fourth-straight month of advances. The Nasdaq has gained more than 1%.
Cook vs Trump
Federal Reserve Governor Lisa Cook faced off against the Trump administration in a court hearing the morning of Aug. 29 over her dismissal. She asked the judge to block President Donald Trump from firing her. The two-hour hearing ended without ruling on Cook’s request for a restraining order.
Cook’s request comes after the Fed governor filed a suit against Trump, challenging his unprecedented attempt to remove her from the central bank’s board of governors. The Fed board sets monetary policy, including interest rates, for the nation.
Trump said he fired Cook for alleged mortgage fraud.
Corporate news
- Kraft Heinz is looking at breaking up the company, according to the Wall Street Journal. Shares gained 2.68%.
- Alibaba reported stronger-than-expected quarterly growth in its cloud computing business, driven by AI-related demand. Shares rallied 12.9%.
- Celsius shares rose 5.34% after PepsiCo raised its take in the energy drink maker to 11%.
- Cosmetics retailer Ulta raised its full-year outlook above Wall Street’s forecasts after posting higher quarterly results than from a year ago. Shares fell 7.14%.
- Semiconductor design company Ambarella topped second-quarter estimates and issued current-quarter guidance above analysts’ expectations. The stock soared 16.78%.
- Marvell Technology met second-quarter adjusted earnings per share estimates but its current-quarter revenue outlook fell below forecasts. Shares slumped 18.6%.
- Peto raised its full-year earnings outlook and swung to a profit in its latest quarter. Shares soared 23.53%.
- Dell raised its outlook for the year due to strong AI demand, but its third-quarter earnings per share outlook fell below Wall Street views. Shares lost 8.88%.
- Buy-now-pay-later company Affirm topped forecasts in the final three months of its fiscal year. The stock jumped 10.58%.
- Caterpillar raised the net impact it expects from tariffs to between $1.5 billion and $1.8 billion this year from a previous range of $1.3 billion to $1.5 billion. It also said it expects full-year adjusted operating profit margin to fall at the low end of its guidance range. Shares slipped 3.65%.
- Gap said same-store sales rose slightly and revenue growth was in line with expectations. Shares added 1.59%.
- Privia Health boosted its full-year guidance. Shares of the administrative-support-for-doctors company gained 5.64%.
Cryptocurrency
Buenos Aires is allowing, for the first time, certain local taxes, vehicle registrations, driver’s licenses and fines to be paid in cryptocurrency.
“The goal is for the city to be a global leader in crypto. We already have the human capital, and now we are creating the tools by reducing bureaucracy to make compliance easier for taxpayers and to support the arrival of new companies setting up here,” said Jorge Macri, chief of government of Buenos Aires, at the launch of the project.
Bitcoin was last down 4.05% at $108,015.70.
(This story was updated with new information.)
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
