The S&P 500 finished August on a strong note, closing out the month with a 2% gain despite some earlier setbacks. The index recovered from its biggest loss in nearly two years, which occurred on August 5th after a weaker-than-expected July jobs report sparked fears of a recession. However, positive labour market data and easing economic concerns helped the S&P 500 bounce back and secure its fourth consecutive monthly win.
By the end of trading on Friday, the S&P 500 had gained 0.04%, while the NASDAQ Composite rose by 1%, and the Dow Jones Industrial Average climbed by 228 points, or 0.63%.
The market’s optimism was further supported by the latest inflation data, showing the core Personal Consumption Expenditure (PCE) index—a key measure of inflation—rose by 2.6% in July, slightly below expectations. This reinforced the belief that the Federal Reserve might begin cutting interest rates as early as next month, with a 68% chance of a 25 basis point cut now anticipated.
On the corporate front, Dell’s stock increased by more than 4% after the company raised its annual forecasts, while Intel saw a 9% jump following reports that it might spin off its foundry business. However, not all companies fared well; Ulta Beauty and Lululemon both lowered their annual sales and profit forecasts due to slowing consumer demand, which led to a drop in their stock prices.
