Stocks Slip Ahead of Holiday Weekend as Tech Weakness Weighs

The stock market closed August on a softer note, slipping into the red as investors showed little appetite to buy the dip ahead of the Labor Day weekend. Losses in mega-cap names, semiconductor stocks, and industrial leaders kept the major averages pinned lower throughout the session.

It was a day of consolidation after what has been an impressive month for equities, one that delivered record highs across the Dow, S&P 500, and Nasdaq. But today’s light volume suggested many traders had already stepped away for the holiday, leaving the market without strong leadership.

The Russell 2000 and S&P MidCap 400 each declined 0.5%, while the equal-weighted S&P 500 slipped 0.1%. Mega-caps were under the most pressure, with the Vanguard Mega Cap Growth Index down 1.2%.

Technology stocks carried the weight of the selling, as NVIDIA fell 3.3% and the Philadelphia Semiconductor Index sank 3.2%. Dell and Marvell were also punished after their earnings reports, while Caterpillar slid more than 3.5% after warning that tariff costs will squeeze margins. These losses combined with concerns over consumer sentiment and sticky PCE inflation to keep buyers at bay.

Despite the market’s downbeat tone, expectations for a September rate cut held steady. Fed Governor Waller reiterated support for a 25-basis-point move, saying he sees room for additional cuts over the next three to six months. The CME FedWatch tool put the probability of a cut at 86.9%, virtually unchanged from yesterday.

Sector performance told the story: technology (-1.6%), consumer discretionary (-1.1%), and industrials (-1.0%) weighed heavily on the S&P 500, while utilities and communication services also slipped modestly. Meanwhile, pockets of strength emerged in health care (+0.7%), consumer staples (+0.6%), real estate (+0.6%), and energy (+0.5%), though gains there weren’t enough to offset broader weakness.

In the end, the market wrapped up August not with the same bang that defined much of the month, but with a whimper, retreating into the long weekend with investors more focused on holidays than risk-taking.

Our model portfolio FTinvest 11 ended the week at 843.02, showing a modest 0.05% gain on Friday, but unable to erase the broader pullback from earlier sessions. For the week, the portfolio slipped 0.88%, underperforming the S&P 500’s 0.1% decline.

Still, the closing level leaves the index within sight of the 850 area, suggesting that a renewed push higher could materialize if market conditions stabilize. For now, the focus turns to whether FTInvest 11 can build a base of support in the low 840s and attempt to retest recent highs in the sessions ahead.