U.S. stocks finished mostly lower Friday as Federal Reserve Chair Kevin Warsh delivered a more hawkish-than-expected inflation warning in his first Jackson Hole keynote address, while sharp semiconductor weakness and a payments-sector shock added to the day's turbulence. The session's central tension pitted Warsh's insistence that "underlying trends" in inflation have not meaningfully improved against a market still digesting Thursday's blowout AI-driven rally, with traders pushing the odds of a September rate hike up to roughly 57% from about 35% ahead of the speech. Chip stocks bore the brunt of the pullback even as communication services and consumer names held up well, and despite Friday's retreat, all three major indexes closed out the week with gains, cushioned by Thursday's Nvidia- and Salesforce-fueled surge.
The Dow Jones Industrial Average was little changed (-0.02%)
The S&P 500 Index fell 0.25%
The Nasdaq Composite declined 0.52%
Stock & Sector Performance
Semiconductors were the standout laggard of the session, reversing much of Thursday's AI-driven strength. Marvell Technology led the group lower, tumbling 10.29% even after beating second-quarter estimates and raising its full-year outlook, as investors focused on softer near-term margin guidance. Nvidia fell 4.58%, while Lam Research dropped 5.24%, Applied Materials lost 4.3%, KLA declined 4.47%, Texas Instruments fell 2.94%, Analog Devices dropped 3.39%, Intel slid 2.85%, and Advanced Micro Devices lost 2.32%. On the upside, communication services and select consumer names outperformed: Netflix rose 2.37%, T-Mobile added 2.04%, AT&T gained 2.26%, and Alphabet climbed 1.71% (Class A) and 1.53% (Class C). Elsewhere, PayPal Holdings was the session's most dramatic mover, plunging 12.71% after Bloomberg reported that Stripe and Advent International had abandoned their roughly $50 billion takeover pursuit of the company.
Magnificent Seven trading was sharply divided along semiconductor lines. Nvidia fell 4.58% and Tesla declined 1.71%, while the rest of the group advanced: Amazon led with a 3.95% gain, Microsoft rose 1.70%, Alphabet added 1.71%, Meta Platforms gained 1.21%, and Apple rose 1.61%. The divergence underscored how Friday's rotation moved decisively away from chip-dependent AI infrastructure names and toward software, cloud, and consumer-platform companies within the same mega-cap cohort.
Major Company Story of the Day
PayPal Holdings was the dominant single-stock story of the session. Shares plunged more than 12% after Bloomberg reported that fintech giant Stripe and private-equity firm Advent International had abandoned their roughly $50 billion takeover pursuit of the company, wiping out weeks of speculative buying interest built around a potential deal. The reversal stood in sharp contrast to Marvell Technology's decline, which fell over 10% despite beating second-quarter estimates and raising its full-year revenue outlook — investors instead focused on softer near-term gross-margin guidance and questions about the timing of revenue from the company's AI-chip agreement with Google, illustrating how even a fundamentally solid quarter can be overshadowed by forward-looking concerns in the current environment.
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