US stocks slipped on Friday as investors took profits ahead of the Labor Day weekend. The S&P 500 Index dropped 0.3% in early trading, sliding below the key 6,500 mark but still on track for four straight months of gains. The NASDAQ 100 Index fell 0.5%, while the Dow Jones Industrial Average lost 0.3%.
Trading volume was almost 25% below its 30-day average, reflecting reduced participation ahead of the holiday. Historically, the S&P 500 has often posted modest losses on the Friday before Labor Day, averaging a 0.1% decline over the past two decades.
Technology stocks weighed heavily on the market. Dell Technologies tumbled nearly 10% after reporting weaker demand for artificial intelligence servers and slimmer profit margins. Marvell Technology fell 16% after its data center revenue missed estimates. NVIDIA, Broadcom, and Oracle also recorded losses, intensifying the pressure on the tech-heavy NASDAQ.
Economic data showed US consumer spending rose in July by the most in four months, underlining resilient demand. The core personal consumption expenditures price index increased 2.9% year-on-year, above the Federal Reserve’s 2% target. The broader PCE index climbed 2.6% compared with the prior year.
The figures reinforced expectations that the Fed may cut interest rates at its next meeting. Fed Governor Christopher Waller again called for lower borrowing costs, while analysts suggested that in-line inflation data strengthens the case for a September cut. According to CME Group data, traders see nearly an 87% probability of a quarter-point reduction.
Treasury yields edged higher following the release. The 10-year Treasury yield rose to 4.23% from 4.21%, while the two-year yield remained steady at 3.63%.
With US markets closed on Monday, attention shifts to September, historically the weakest month for equities. Bank of America data show the S&P 500 has declined in 56% of September since 1927, with an average drop of 1.17%. Losses are steeper in the first year of a presidential term, averaging 1.62%.
Investors are also focused on the upcoming jobs report due Friday. Economists expect US employers to add 78,000 workers in August, after hiring slowed sharply in recent months and unemployment ticked higher.
Meanwhile, individual stock movements attracted attention. Ambarella rose 29% following high profits and revenue upgrade, and SentinelOne is up 6.6 percent on a better outlook. Alibaba rose 8.4% on AI-enhanced growth, but Petco surged 19% on a guidance increase. Comparatively, Caterpillar fell 2.6 percent on tariff issues, and Gap edged down as margin pressures set in.
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