Stocks are losing ground on Wall Street in early trading Friday, pulling the market down from its latest all-time highs, after a closely watched measure of inflation showed prices mostly held steady last month.
The S&P 500 fell 0.5% a day after climbing to a record high. The benchmark index is set to end August about 2%, which would be its fourth straight month of gains.
Losses in technology weighed on the market, offsetting gains in health care and other sectors.
Still, excluding the volatile food and energy categories, prices rose 2.9% last month from a year earlier, up from 2.8% in June and the highest since February.
While inflation is much lower than the roughly 7% peak it reached three years ago, it is still running noticeably above the Fed’s 2% target.
Lower rates can boost investment prices and the economy by making it cheaper for U.S. households and businesses to borrow, but they risk worsening inflation.
Treasury yields mostly rose in the bond market. The yield on the 10-year Treasury rose to 4.23% from 4.21% late Wednesday. The yield on the two-year Treasury, which more closely tracks expectations for Federal Reserve action, held steady at 3.63%.
The Fed will get to review two more important inflation barometers before its next policy meeting, the producer price index and consumer price index. Unless those reports show a huge spike in inflation, the Fed is “almost guaranteed” to cut interest rates next month, said Chris Zaccarelli, chief investment officer for Northlight Asset Management.
European markets were mostly lower and Asian markets closed mixed.
U.S. markets will be closed on Monday for the Labor Day holiday.
