US Stock Markets Close Lower Amid Sticky Inflation and Rate Cut Speculation

US stock markets closed lower on Friday, with the Dow Jones Industrial Average falling 0.2% to 45,544.88 and the Nasdaq Composite declining 1.2% to 21,455.55. The S&P 500 tumbled 0.6% to 6,460.26. The technology-heavy Nasdaq was weighed down by the weak performance of tech stocks, with AI-powered fabless semiconductor giant Marvell Technology Inc. being the major loser. Sticky inflation data, with the PCE price index rising 0.3% in July and core PCE inflation up 2.9% year over year, also weighed on the markets.

US stock markets closed lower on Friday, with the Dow Jones Industrial Average falling 0.2% to 45,544.88 and the Nasdaq Composite declining 1.2% to 21,455.55. The S&P 500 tumbled 0.6% to 6,460.26. The technology-heavy Nasdaq was weighed down by the weak performance of tech stocks, with AI-powered fabless semiconductor giant Marvell Technology Inc. being the major loser. Sticky inflation data, with the PCE price index rising 0.3% in July and core PCE inflation up 2.9% year over year, also weighed on the markets [1].

The personal consumption expenditures price index (PCE), which is the Federal Reserve's preferred inflation measure, showed that core inflation ran at a 2.9% seasonally adjusted annual rate in July, meeting estimates but higher than June. Despite the higher prices, consumer spending increased 0.5% on the month, in line with forecasts and indicative of strength. Personal income accelerated 0.4% [1].

The Federal Reserve uses the PCE price index as its primary forecasting tool. Policymakers consider core inflation to be a better indicator of longer-term trends as it excludes the volatile gas and groceries figures. Although the inflation numbers were in line with expectations, markets expect the Fed to resume lowering its benchmark interest rate when policymakers convene next month [1].

Marvell Technology Inc.'s stock fell after the company reported its second quarter of fiscal year 2026 financial results. The company's earnings did not meet market expectations, leading to a decline in its stock price. Marvell's stock has been under pressure due to the company's strategic reallocation of capital to focus on AI and data centers. The company's 2nm SRAM technology and 64 Gbps bi-directional die-to-die (D2D) interface IP have been key drivers of growth in the AI semiconductor market [2].

Marvell's 58% year-over-year revenue growth in Q2 2026 was driven by its AI-driven data center strategy, strategic capital reallocation, and 2nm SRAM innovation. The company's $2.5 billion automotive Ethernet divestiture funded AI R&D and expanded partnerships with AWS and NVIDIA for hyperscaler infrastructure solutions [3]. Despite the strong financial performance, Marvell's stock price has been negatively impacted by the broader market sentiment and the company's strategic shifts.

In conclusion, the US stock markets closed lower on Friday due to sticky inflation data and Marvell Technology Inc.'s disappointing earnings. The PCE price index showed that core inflation was up 2.9% year over year, and consumer spending increased 0.5% on the month. Marvell's stock price fell after the company reported its second quarter financial results, which did not meet market expectations. The company's strategic reallocation of capital to focus on AI and data centers has been a key driver of growth, but the broader market sentiment and the company's strategic shifts have negatively impacted its stock price.

References:
[1] https://www.cnbc.com/2025/08/29/pce-inflation-report-july-2025.html
[2] https://www.morningstar.com/stocks/xnas/mrvl/quote
[3] https://www.ainvest.com/news/marvell-technology-ai-driven-data-center-strategy-high-growth-play-semiconductor-sector-2508/