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US dollar index last down against euro after PCE data

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Oil prices lower with weaker demand expected

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Fed funds futures price in 89% odds of a US cut next month

(Updates prices)

By Caroline Valetkevitch

NEW YORK, Aug 29 (Reuters) -

Major stock indexes fell on Friday, with technology shares

including Dell Technologies ( DELL ) leading declines, while the

dollar weakened against the euro after U.S. inflation data kept

alive expectations of a September interest rate cut.

Dell dropped 8.9% after it reported results late Thursday

that included

high manufacturing

costs for artificial intelligence-optimized servers. Other

AI-related shares fell in the broader tech selloff including

Nvidia ( NVDA ), down 3.3%, and Broadcom ( AVGO ), down 3.6%.

The Nasdaq fell more than 1% and the S&P 500 technology index

fell 1.6%.

The U.S. Commerce Department said on Friday its Personal

Consumption Expenditures Price Index (PCE) rose 0.2% in July,

versus an unrevised 0.3% increase in June and matching the

estimate of economists polled by Reuters.

In the 12 months through July, PCE inflation increased 2.6%

after climbing 2.6% in June. Stripping out the volatile food and

energy components, the so-called core PCE Price Index increased

0.3% last month. That followed a 0.3% rise in core inflation in

June.

"You have to love it when a plan comes together. Today's

numbers on both the personal consumption, expenditure, and

income, and spending, were right down the middle of the

fairway," Art Hogan, chief markets strategist for B. Riley

Wealth in Boston, said via email.

"This leaves the door wide open for the Fed to cut rates in

September and likely again in October and in December."

Traders are now pricing in 89% odds of a cut by the Federal

Reserve next month, up from 84% before the data.

Traders had increased bets on more cuts after Fed Chair

Jerome Powell last Friday adopted an unexpectedly dovish tone.

The euro was last up 0.11% at $1.1696. The dollar

index, which measures the greenback against a basket of

currencies, fell 0.09% to 97.79.

The Dow Jones Industrial Average fell 92.02 points,

or 0.20%, to 45,544.88, the S&P 500 fell 41.60 points, or

0.64%, to 6,460.26 and the Nasdaq Composite fell 249.61

points, or 1.15%, to 21,455.55.

"Today is just weakness in the top of the market, in tech,"

said Zachary Hill, head of portfolio management at Horizon

Investments in Charlotte, North Carolina.

For the month

, the S&P 500 rose 1.9%, the Dow rose 3.2% and the Nasdaq

added 1.6%.

Major U.S. financial markets will be closed for the Labor

Day holiday on Monday.

European shares closed lower, hitting their lowest in over two

weeks, weighed down by British banks. Data released on Friday

also showed French consumer prices rose slightly less than

anticipated in August while Spain's European Union-harmonized

12-month inflation rate was steady at 2.7%.

MSCI's gauge of stocks across the globe fell

4.77 points, or 0.50%, to 951.57. The pan-European STOXX 600

index fell 0.64%.

In Treasuries,

l

onger-dated yields

edged higher as traders closed positions ahead of the long

weekend and repositioned for month-end. The yield on benchmark

U.S. 10-year notes rose 1.6 basis points to 4.223%.

The two-year note

yield was last down 1.6 basis points on the day at 3.619%.

It has fallen 33 basis points this month, the most in a year.

Fed Governor Christopher Waller on Thursday said he wanted to

start cutting interest rates next month and "fully expects" more

rate cuts to follow, to bring the Fed's policy rate closer to a

neutral setting.

Investors are keen to see U.S. jobs data for August, which

is due next Friday.

They also are watching for more news on U.S. President Donald

Trump's attempt to fire Fed Governor Lisa Cook.

A federal judge said on Friday she would set an expedited

briefing schedule in Cook's bid to temporarily block Trump from

firing her while she pursues a lawsuit that says he has no valid

reason to remove her.

Oil prices were lower. U.S. crude fell 59 cents to settle

at $64.01 a barrel and Brent declined 50 cents to settle

at $68.12. Spot gold rose 0.88% to $3,446.75 an ounce.