Stocks were lower on Friday as investors digested inflation data that matched expectations and looked ahead to the Labor Day weekend.

The Dow fell 65 points, or 0.14%. The broader S&P 500 ticked down by 0.2% and the tech-heavy Nasdaq Composite slid 0.37%.

The major indexes pulled back slightly after notching three consecutive days of gains. The Dow and S&P 500 on Thursday hit record highs.

Stock were lower Friday morning as data showed the Personal Consumption Expenditures index rose 2.6% year-over-year in July, in line with expectations.

The Federal Reserve’s preferred inflation gauge — a core measure of PCE that strips out volatile food and energy prices — rose 2.9% year-over-year in July. It’s the hottest annual pace since February but was also in line with expectations.

“Inflation is increasing ever so slightly, but right in line with forecasts,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in an email.

US stocks are set to end August on a quiet note. But it’s been another wild month for markets.

Traders have braced a barrage of headlines, from from a weaker-than-expected jobs report, to the implementation of President Donald Trump’s widespread tariffs, to his administration’s attempts to oust Federal Reserve Governor Lisa Cook.

And, through it all, stocks have continued to steadily rise, buoyed by hopes for Fed rate cuts, better-than-expected corporate earnings and slowing but stubborn confidence that an AI boom might reap big rewards for investors.

About 98% of the companies in the S&P 500 have reported second-quarter earnings, with 81% of those companies beating Wall Street’s earnings expectations, according to FactSet data.

“The US stock market is at an all-time high, thanks in part to rapid earnings growth and expectations for that to continue,” James Reilly, senior markets economist at Capital Economics, said in a note.

Fed Chair Jerome Powell delivered remarks at a central banking forum in Jackson Hole, Wyoming, last week that hinted potential rate cuts could be on the horizon.

While Powell’s remarks signaled concerns about a slowing labor market, investors and traders have been ecstatic about the potential for lower borrowing costs.

The Russell 2000, an index tracking smaller companies that are more sensitive to rates, soared 7.5% this month as investors adjusted to the prospect of rate cuts as soon as September.

Meanwhile, Wall Street’s fear gauge, the CBOE Volatility Index, is trading near its lowest levels of the year, signaling relative calm and confidence in markets.

The S&P 500 on Thursday closed above 6,500 points for the first time ever. It was the benchmark index’s 20th record high this year.

While stocks dipped lower on Friday, the S&P 500 and Dow are on track for four months of gains in a row.

The S&P 500 has gained every week of August, which is the first time this year that the index has risen each week in a given month.

Stocks’ ascent to fresh records come as the Trump administration ramps up its assault on the central bank. While uncertainty lingers about the Trump administration’s feud with Cook, it’s being deliberated by the courts and investors are awaiting more clarity about what might happen.

“It’s not clear whether he has the power to fire Lisa Cook, and so the market is waiting and seeing how far this will go,” Rob Haworth, senior investment strategy director at US Bank Asset Management Group, said.

While stocks have floated near record highs, September could be a difficult month, according to Adam Turnquist, chief technical strategist at LPL Financial. Across the past 75 years, the S&P 500 has notched an average decline of 0.7% in September, “making it the worst performing month for stocks,” Turnquist said.

It will be another month jam-packed with economic data. Wall Street will be watching jobs data for August, set to be released on September 5; in addition to Consumer Price Index data for August set to be released on September 11.

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