Profit-taking during the long holiday in the U.S.: Inflation data stirs the pot, investors watch and wait for short positions in September.

The US stock market showed a weak trend on Friday, as investors chose to lock in profits ahead of the long Labor Day weekend, especially after the S&P 500 index reached a record high this week and Nvidia announced impressive earnings. The S&P 500 index fell by 0.2%, the Nasdaq Composite index declined by 0.4%, and the Dow Jones Industrial Average dropped by 103 points, a decrease of about 0.4%.

Core PCE inflation data meets expectations, but still under pressure.

The year-on-year core Personal Consumption Expenditures Price Index (Core PCE) for July in the United States was 2.9%, in line with market expectations, but accelerated compared to the previous month, reaching a new high since February of this year. This index is a key indicator for the Federal Reserve to monitor inflationary pressures, excluding the volatility of food and energy prices.

Morgan Stanley wealth management analysts pointed out: "The Federal Reserve has opened the door to interest rate cuts, but the actual room for easing will depend on whether labor market weakness is more evident than inflationary pressures. This PCE met expectations, and the market focus will continue to be on the employment market, with the possibility of a rate cut in September still relatively high."

Nvidia stock price falls, market focuses on competition pressure from China

Despite Nvidia's quarterly earnings report this week showing a 56% growth in revenue, further solidifying its leadership position in the AI field, the company's stock still fell about 2% on Friday, continuing the weak trend earlier this week. According to a report by The Wall Street Journal, Chinese e-commerce giant Alibaba has developed a more advanced AI chip, attempting to fill the gap left by Nvidia's inability to ship smoothly due to US-China technology restrictions. In contrast, Alibaba's stock listed in the US rose by over 2%.

The performance of technology and industrial stocks is diverging.

Apart from Nvidia, the overall performance of tech stocks was also mixed. Dell Technologies' stock price plummeted by 10%, mainly due to the company's conservative outlook for operations this quarter. Meanwhile, heavy equipment manufacturer Caterpillar fell by 3%, as the company warned it could face cost pressures of $1.5 billion to $1.8 billion this year due to tariffs.

Overall rise in August, is the stock market entering a seasonal adjustment period?

Despite the market pullback on Friday, U.S. stocks have still performed well overall this month. The S&P 500 index rose 2.6% in August, the Dow Jones index increased by 3.4%, and the Nasdaq index also saw a gain of 2.8%. Notably, the S&P 500 surpassed the 6,500 point mark for the first time on Thursday.

However, the market is about to enter September, historically the most volatile month. According to data from the "Stock Trader's Almanac," since 1950, September has consistently been the month with the largest average fall for the S&P 500, Dow Jones, and Nasdaq, with the S&P 500 averaging a decline of 0.7%.

Are investment opportunities still available? Analysts are optimistic about the year-end market.

Although September has traditionally been viewed as a "bearish month," some market experts believe this will not change the current bullish trend. Chris Zaccarelli, Chief Investment Officer of Northlight Asset Management, stated, "While volatility may increase in September and October, this actually presents a great entry opportunity. If the Federal Reserve begins to cut interest rates without the economy falling into recession, we are likely to see the stock market continue to strengthen before the end of the year."

This article discusses the profit-taking during the long holidays in the United States: Inflation data disrupts, investors are cautious regarding the "bearish" September. First appeared in Chain News ABMedia.