US stocks slip as Wall Street braces for an update on inflation
[August 12, 2025] By
STAN CHOE
NEW YORK (AP) — U.S. stocks edged back from their record heights on
Monday in Wall Street’s final moves before an upcoming update on
inflation.
The S&P 500 dipped 0.3% after flirting with its all-time high, which was
set two weeks ago, earlier in the day. The Dow Jones Industrial Average
dropped 200 points, or 0.5%, while the Nasdaq composite shaved 0.3% off
its own record.
The highlight of this week for Wall Street will likely arrive on
Tuesday, when the government will report how bad inflation was across
the country in July. Economists expect it to show U.S. consumers had to
pay prices for groceries, gasoline and other costs of living that were
2.8% higher from a year earlier, a slight acceleration from June’s 2.7%
inflation.
Inflation has remained above 2%, even if it has improved substantially
from its peak above 9% three years ago. And the worry is that President
Donald Trump’s tariffs could push inflation higher.
That in turn is raising fears about a potential, worst-case scenario
called “stagflation” where the economy stagnates but inflation remains
high. The Federal Reserve has no good tool to fix both at once, and it
would need to concentrate on either the job market or inflation first.
But helping one of those areas by moving interest rates would likely
hurt the other.
A top Fed official, Michelle Bowman, said on Saturday that she believes
the job market is the bigger concern. She is still backing three cuts to
interest rates by the Fed this year following this month’s stunning,
weaker-than-expected report on the U.S. job market. Trump has also been
angrily calling for cuts to interest rates to support the economy.
Other Fed officials, led by Chair Jerome Powell, have been more
hesitant. Powell has said he wants to wait for more data about how
Trump’s tariffs are affecting inflation before the Fed makes its next
move, and Tuesday’s update on the consumer price index may offer a big
clue about that.
Strategists at Stifel are warning that stagflation may already be on the
way, with spending by U.S. consumers slowing. That in turn could create
a reckoning for investors after they sent stock prices soaring to
records from their low point in April.
“Rate cuts cannot save an overvalued S&P 500,” according to the
strategists, led by Thomas Carroll and Barry Bannister.
One way companies can make their stock prices appear less expensive is
to deliver bigger profits.
Micron Technology climbed 4.1% after raising its forecasts for profit
and revenue in the current quarter, which will end later this month. The
maker of memory for computers said it’s benefiting from higher prices
for its products.
[to top of second column] |
Traders Robert Finnerty Jr., left, and Michael Milano work on the
floor of the New York Stock Exchange, Tuesday, July 29, 2025. (AP
Photo/Richard Drew)
 AMC Entertainment rose 3.4% to trim
its loss for the year so far, which came into the day at 26.4%,
after reporting better results for the spring than analysts
expected. The theater chain said moviegoers paid more for tickets,
while also spending more on food and drinks.
TKO Group Holdings climbed 10.2% after reaching a deal to distribute
its UFC mixed martial arts matches on the Paramount+ streaming
platform. But Paramount Skydance’s stock dropped 3.7%.
Also on the losing side of Wall Street was C3.ai after the AI
application software company warned it may report an operating loss
as large as $124.9 million for its first quarter. CEO Thomas Siebel
called the first-quarter sales results “completely unacceptable,”
and its stock tumbled 25.6%.
All told, the S&P 500 fell 16.00 points to 6,373.45. The Dow Jones
Industrial Average dropped 200.52 to 43,975.09, and the Nasdaq
composite slipped 64.62 to 21,385.40.
The price of gold, meanwhile, eased after Trump said he would not
place tariffs on the metal. That followed Friday’s brouhaha in the
gold market after the U.S. Customs and Border Patrol seemed to rule
that some kinds of gold bars coming from Switzerland would face a
tariff. That in turn caused a disconnect between the prices of gold
trading in New York versus in London, but the market has since
calmed.
Gold for December delivery settled at $3,404.70 per ounce in New
York, down 2.5%.
In stock markets abroad, indexes were mixed amid mostly modest
movements across Europe and Asia.
In the bond market, the yield on the 10-year Treasury held at 4.27%,
where it was late Friday.
___
AP Business Writers Wyatte Grantham-Philips and Elaine Kurtenbach
contributed.
All contents © copyright 2025 Associated Press. All rights reserved
 |
