Wall Street Indexes Extended Rally to Fourth Consecutive Month, Stubborn Inflation Data

Barry Adams
29 Aug, 2025
New York City

Wall Street indexes turned lower on Friday as investors booked profit ahead of the three-day weekend. 

The S&P 500 index decreased 0.3%, and the tech-heavy Nasdaq Composite declined 0.6% as investors reviewed earnings updates from leading tech and industrial companies. 

U.S. indexes retreated after the latest economic report confirmed stubborn inflationary forces and a widening goods trade deficit. 

 

Inflation Stayed Elevated In July

The personal consumption expenditure price index advanced 0.2% on the month and 2.6% on the year in July. 

The core PCE price index inched up 0.3% on the month and advanced 2.9% on the year, confirming underlying elevated inflationary pressure. 

The PCE price index, the preferred measure of inflation by the policymakers, generally understates inflation because it includes consumers' behavior to substitute cheaper products.

 

U.S. Goods Deficit Expanded In July

The U.S. goods trade deficit widened by $18.7 billion from the previous month to $103.6 billion, according to the latest data released by the U.S. Census Bureau.

On an annual basis, the goods trade deficit was nearly unchanged.

Goods exports decreased 0.1% from the previous month to $178 billion but rose from $173 billion a year ago. 

Goods imports soared 7.1% from the previous month to $281.5 billion, as businesses front-loaded inventories ahead of new U.S. tariffs.

Goods imports in the year-ago period totaled $277 billion. 

 

U.S. Stock Movers 

Alibaba Group Holding Ltd. jumped 6.4% to $119.57, and the China-based e-commerce company reported mixed quarterly results. 

Total revenue rose 2% to 247.7 billion yuan, and net income attributable to shareholders surged 78% to 43.1 billion yuan ($6 billion) from 24.3 billion yuan a year ago. 

The earnings growth was driven by mark-to-market changes from equity investment and gains from the disposal of the local consumer service business of Trendyol.

Cloud computing unit growth accelerated to 26% to 33.4 billion yuan, from an increase of 18% in the March quarter. 

The company's domestic online business expanded sales by 10% from a year ago to 140 billion yuan.

Autodesk Inc. soared 11% to $323.0 after the software company delivered better-than-expected earnings in the second quarter. 

The design software company reported revenue of $1.76 billion and net income of $2.62 per share.

Caterpillar Inc. declined 2.4% to $424.49, and the farm and construction equipment company said tariff-driven charges could range between $1.5 billion and $1.8 billion in the current fiscal year. 

Revenue in the second quarter edged down to $16.6 billion from $16.7 billion, net income fell to $2.2 billion from $2.7 billion, and diluted earnings per share fell to $4.62 from $5.48 a year ago, respectively. 

Dell Technologies dropped 9.8% to $121.04 after the company's earnings outlook fell short of investor expectations. 

Consolidated revenue in the fiscal second quarter increased 19% to $29.78 billion from $25 billion, net income jumped 32% to $1.16 billion from $882 million, and diluted earnings per share rose 38% to $1.70 from $1.23 a year ago.

Dell Technologies returned $1.3 billion to shareholders in the quarter through share repurchases and dividends.

Dell guided fiscal third-quarter revenue to be between $26.5 billion and $27.5 billion, with diluted earnings per share expected to be $2.07 and adjusted diluted earnings per share to be $2.45 at the midpoint, respectively.