Wall Street Slips as Inflation Data Fans Tariff Concerns

NEW YORK, Aug 29 (Reuters) - U.S. stock indexes declined on Friday as investors digested July’s Personal Consumption Expenditures inflation data and the end of a low-value tariff exemption, stoking worries that higher import costs could feed into prices.

The Dow Jones Industrial Average fell 45.07 points, or 0.10%, to 45,591.54, while the S&P 500 dropped 20.00 points, or 0.30%, to 6,482.34. The Nasdaq Composite slid 134.06 points, or 0.62%, to 21,570.53.

Consumer prices, measured by the Fed’s preferred PCE index, climbed 2.6% year-on-year in July-above the central bank’s 2% target-and core inflation also accelerated, underscoring lingering price pressures. Simultaneously, the expiration of the $800 de-minimis tariff exemption on small-package imports drove concerns about rising input costs for businesses and consumers.

Technology stocks underperformed, with Dell Technologies dropping 14.0% and Marvell Technology falling 6.0% after issuing cautious revenue forecasts. Despite the pullback, traders remain positioned for a 25-basis-point Fed rate cut in September, with CME Group’s FedWatch Tool pricing in over an 80% probability of easing next month.

Earlier in the week, the S&P 500 and Dow had both reached all-time highs, buoyed by strong corporate earnings and dovish Fed comments at Jackson Hole. But Friday’s data tempered optimism, as market participants weighed the impact of tariffs on inflation and profit margins.