US stocks fell on Tuesday, pulling back from a record-setting streak, as Fed Chair Jerome Powell signaled caution on further rate cuts due to high equity valuations. The Dow fell 0.3%, the S&P 500 0.6%, and the Nasdaq lost 1%.
Stocks jumped on Monday, clinching a third day of record-high closes, led by Nvidia’s surge after investing $100 billion in OpenAI. Powell’s cautious comments on Tuesday cooled the rally, emphasizing the challenge of balancing risks in the market.
Powell noted “two-sided risks” in inflation and employment, suggesting no risk-free path for interest rates. Wall Street awaits the release of the Fed’s inflation gauge. US business activity cooled, with rising material prices indicating persistent price pressures.
Micron Technology’s quarterly earnings are awaited for updates on AI demand and revenue guidance, projecting a 40% sales jump. Nvidia surged after the chipmaker’s OpenAI investment. Oracle stock reversed gains after the TikTok deal, with new co-CEOs announced.
The “Magnificent Seven” tech stocks, except Meta, fell Tuesday. Nvidia and Amazon led declines. The Nasdaq climbed to a record high Monday, driven by Nvidia’s OpenAI deal. Apple shares soared on strong iPhone demand, while Amazon and Meta extended losses.
US manufacturing and services sectors grew below expectations in September, per S&P’s Flash PMI. PMI data signals slower growth, job cuts, and elevated input prices. Inflation remains high, squeezing margins but indicating potential moderation.
Nvidia shares pulled back after a record high close following the OpenAI investment announcement. The deal will deploy Nvidia’s AI for training new models, with analysts estimating significant revenue potential. Questions arise about the deal’s accounting treatment.
US stocks held steady on Tuesday after hitting record highs. The Dow nudged up, while the S&P 500 and Nasdaq hovered near the flat line. Tech stock gains on AI optimism balanced caution from Powell’s speech on rate cuts and market risks.
Read more at Yahoo Finance: Dow, S&P 500, Nasdaq slide as Powell warns of ‘challenging situation’