US stocks posted solid gains for August 2025, but the market slid on the last trading day (August 29) as investors took profits and weighed inflation, tariff concerns, and slowing tech momentum. The outlook for September is cautious, with analysts expecting heightened volatility historically tied to seasonal effects, profit-taking, and macro risks such as tariffs and higher inflation. August 2025 Performance S&P 500: Rose roughly 1.9–2.6% for August, marking its fourth consecutive monthly gain and reaching fresh record highs mid-month before retreating. Dow Jones: Up more than 3% for the month, closing at new all-time highs earlier in the week before slipping 0.2% on the last day. Nasdaq Composite: Gained about 2–2.8% for August, with five straight months of gains, but dropped over 1% on August 29 as tech stocks underperformed. The market’s last day slide was linked to traders locking in profits, pre-Labor Day caution, persistent AI sector cooling, fresh tariff threats, and mixed inflation data. August 29, 2025: Market Slide S&P 500: Fell 0.6–0.8%. Dow: Lost 0.2–0.5% and dropped around 92–202 points. Nasdaq: Declined 1.15–1.3%, led by more pronounced weaknesses in tech, including Nvidia and Dell. The decline reflected a mix of profit-taking, long weekend positioning, earnings overhang from tech, inflation concerns, and market uncertainty heading into September. September 2025 Outlook September is traditionally the weakest month for US stocks, averaging a 0.7–1% decline in historical data. Strategists anticipate potential pullbacks of 5–10%, or even up to 15% if macro risks escalate. Market risks include expanded tariffs, sticky inflation, lagging Fed rate cuts, and tech sector volatility; cautious sentiment suggests volatility and possibly more pronounced profit-taking until macro clarity improves. Key Drivers and Risks Investors are watching the impact of Trump’s new tariffs and the abolition of some trade exemptions, which may pressure consumer and tech stocks. Inflation remains a concern, with core measures holding steady but above pre-2024 levels. AI-related stocks cooled after rapid gains, and broader market valuations have led to increased calls for a correction in the historically volatile September period. US stocks finished August strong despite the last day’s pullback, but caution dominates the outlook for September given heightened volatility and ongoing macro risks.