Wall Street Ends August Quietly After a Tumultuous Summer
Wall Street wrapped up August on a surprisingly calm note, closing out what had been a volatile and headline-packed summer. On the final trading day of the month, the Dow Jones Industrial Average slipped by 92 points, or about 0.2%. The S&P 500 lost 0.64%, and the Nasdaq Composite, weighed down by technology stocks, dropped 1.15%.
But despite Friday’s dip, the broader picture painted August as a winning month. The Dow rose 3.2%, the S&P gained 1.91%, and the Nasdaq added 1.58%. Each of the three indexes has now strung together several consecutive months of gains — with the Nasdaq enjoying its best streak since early 2024. This momentum has been fueled by better-than-expected corporate earnings, easing trade tensions, and growing confidence that the Federal Reserve may soon lower interest rates.
Still, the rally has started to lose some steam, especially in the red-hot tech sector. Shares of Dell and Marvell Technology plunged nearly 9% and 19%, respectively, after disappointing earnings reports. Nvidia, the poster child of the AI trade, fell more than 3% on Friday and notched its first monthly decline since March. Analysts have noted that while companies are still posting solid results, expectations had been set so high that anything short of spectacular feels like a letdown.
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Inflation data added another layer to the mix. The Personal Consumption Expenditures index — the Fed’s preferred measure of inflation — showed prices rising 2.6% year-over-year in July. The core measure, which strips out food and energy, climbed 2.9%. Both figures were right in line with forecasts, signaling that while inflation remains slightly hot, it is not accelerating beyond expectations.
This month was also shaped by a swirl of political and economic headlines. Traders navigated weaker-than-expected jobs data, the rollout of new tariffs from the Trump administration, and even attempts to remove a Federal Reserve governor. Yet, through all of that, stocks largely pushed higher, supported by strong corporate earnings. Roughly 98% of S&P 500 companies have now reported second-quarter results, and more than 80% have beaten Wall Street estimates.
Looking ahead, September could bring fresh challenges. Historically, it has been the weakest month for stocks, with the S&P 500 averaging a 0.7% decline over the past 75 years. Many strategists are cautioning that a pullback may be overdue. Still, others see that as an opportunity to scoop up stocks at lower prices.
For now, investors are keeping an eye on the Federal Reserve. Hints from Chair Jerome Powell about possible rate cuts later this year have already lifted smaller-company stocks, with the Russell 2000 surging 7% in August — its best showing since last November. Meanwhile, gold prices, often a safe haven during uncertain times, jumped 5% this month.
So as markets head into September, investors are balancing optimism with caution. The summer brought big gains and high hopes, but the question now is whether that momentum can withstand the seasonal headwinds and political uncertainty still looming over Wall Street.
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