Wall Street ends lower after Fed Chair Warsh reaffirms inflation fight

By Saeed Azhar, Purvi Agarwal and Niket Nishant

NEW ‌YORK, Aug 28 (Reuters) - Wall Street's ​main indexes ended ​lower on Friday, with investors turning cautious after Federal Reserve Chair Kevin Warsh reiterated the central bank's focus on fighting inflation, increasing prospects for a rate hike.

Without confidence that inflation is heading clearly and with sufficient speed to the Fed's 2% goal, ‌the central bank would have "more work to do," Warsh said in his first Jackson Hole speech.

Traders added to bets ⁠on a September rate hike after Warsh also said he felt recent inflation data did not suggest a change in trend.

Traders are now split between a rate hike and a hold ‌in September, as they were before inflation ‌data this month painted a mixed picture.

"Why the market is modestly reacting is he (Warsh) is very adamant that the 2% inflation target is going to remain. He is reiterating the hawkishness, but in a more of a consistent way than an incremental way," said Mark Hackett, chief market ​strategist for Nationwide.

"There's been somewhat misguided thoughts among investors that this would soften a little bit. Clearly, that's not the case."

Warsh's speech rounds out a busy week packed with results from corporate heavyweights such as Nvidia and Salesforce, alongside a batch of fresh economic data.

"We were encouraged by ⁠Warsh's speech. But talk is cheap," said Aditya Bhave, head of U.S. economics research at Bank of America, in a note.

He said the onus was on Warsh to deliver a rate hike in ​September, unless the August jobs and inflation data are very soft. Otherwise, Bhave said, Warsh would probably lose credibility.

Chip stocks were mixed, pulling back from the previous session's rally sparked by Nvidia's blockbuster forecast that signaled the ​AI-driven boom had further to run.

The S&P 500 lost 19.23 points, or 0.25%, to ‌7,711.76 and the Nasdaq Composite lost 138.93 points, or 0.52%, to 26,402.42.

The Dow Jones Industrial Average closed 9.45 points, or 0.02%, lower to 53,559.99.

For the week, the S&P 500 gained 0.49%, the Nasdaq rose 0.85%, and the Dow climbed ⁠0.53%.

Market heavyweight Nvidia slipped 4.6%. Marvell Technology tumbled 10.3% on doubts over the timing of revenue from its AI chip agreement with Alphabet's Google, even though Marvell boosted its 2027 revenue forecast.

Most megacap stocks were higher. Alphabet gained 1.7%, making the S&P 500 communication services sector the biggest boost to the index. Apple also rose 1.6%.

Salesforce extended ⁠gains from the previous session, providing support to the Dow. It closed 1.6% higher.

PayPal fell 12.7% the day after Bloomberg News reported that a consortium of buyout firm ​Advent and payment processor Stripe had decided to abandon their pursuit of the payments firm.

Gap's shares advanced almost 13% as the retailer named industry veteran Michael Francis as Old Navy's new CEO and raised its annual profit forecast.

Ulta Beauty fell 4.2% after the cosmetics retailer's comparable sales growth dropped in the second quarter.

Separately, the final reading of ‌the University of Michigan's consumer sentiment survey stood at 51.7, compared with estimates of 51, according to economists polled by Reuters.

Declining issues outnumbered advancers by a 1.77-to-1 ratio on the NYSE. There were 167 new highs and ‌107 new lows on the NYSE.

On the Nasdaq, 1,494 stocks rose and 3,272 fell as declining issues outnumbered advancers by a 2.19-to-1 ratio.

The S&P 500 posted 5 new 52-week ⁠highs and 3 new lows while the Nasdaq Composite ‌recorded 51 new highs and 120 new lows.

Volume ​on U.S. exchanges was 15.68 billion shares, compared with the 15.8 billion average for the full session over the last 20 trading days.

(Reporting by Purvi Agarwal and Niket Nishant in Bengaluru and Saeed Azhar in New York; Editing by Maju Samuel ‌and David Gregorio)

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