NEW YORK (AP) — U.S. stock indexes closed lower and gave back some of their stellar gains for the year. The S&P 500 fell 0.4% Tuesday, though it’s still near its all-time high set earlier this month. The Dow Jones Industrial Average fell 0.6%, and the Nasdaq composite fell 0.3% from its record set the day before. Nvidia, the superstar stock that’s been a big reason for Wall Street’s run to records this year, fell for the eighth time in the last nine days. Treasury yields held relatively steady after sales at U.S. retailers strengthened by more than expected. Bitcoin set another record.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — U.S. stock indexes are slipping on Tuesday and trimming some of their .
The S&P 500 fell 0.5% in afternoon trading, though it’s still near its all-time high set earlier this month. The Dow Jones Industrial Average was down 343 points, or 0.8%, as of 2:27 p.m. Eastern time, and the Nasdaq composite slipped 0.4% from .
Nvidia, the that’s been a big reason for Wall Street’s run to repeated records this year, fell 1.6% to weigh on the market. It’s on track for an eighth loss in the last nine days and has dropped more than 10% from its record set last month, as its moonshot momentum slows.
Like the overall U.S. market, Nvidia’s stock has climbed so much that critics warn expectations have become too high and that the stock price makes sense only if everything goes correctly for it from here.
Across a survey of global fund managers, strategists at Bank of America found many plowing into U.S. stocks and pulling out of their cash reserves to do so. The survey found fund managers are holding a notably small percentage of their overall portfolios in cash, similar to 2002 and 2011, which preceded tougher times for riskier investments.
The survey’s broadest measure of optimism, based on expectations for economic growth and other indicators, is at its highest since August 2021, strategist Michael Hartnett said in a BofA Global Research report.
The S&P 500 is on track for one of its best years since the millennium because the U.S. economy has remained remarkably resilient, hopes are high that policies will boost growth but not inflation too badly and the Federal Reserve has begun to make things easier by cutting interest rates from a two-decade high.
The Fed is widely expected to to its main interest rate for this year on Wednesday, and officials are also scheduled to unveil projections about where they see rates heading in upcoming years.
Expectations for coming cuts have been on the downswing, though, as looks to be stubborn to slow the last bit down to the Fed’s 2% target.
A report on Tuesday showed last month than economists expected. That could be an indication of an economy that doesn’t need much more help from easier interest rates. While lower rates can goose the economy, they can also give inflation more fuel.
“The Fed is still on track to cut rates tomorrow, but more strong economic data could make it more likely they’ll pause in January,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
In the bond market, Treasury yields held relatively steady following the report. The 10-year Treasury yield edged down to 4.38% from 4.40% late Monday. The two-year yield, which more closely tracks expectations for the Fed, slipped to 4.24% from 4.25%.
On Wall Street, Broadcom fell 6% and was heading for its first loss following two big gains where it led the market. The tech company's stock leaped 24.4% and then 11.2% in consecutive days after delivering a stronger profit report than analysts expected and giving a forecast for upcoming revenue that was also encouraging thanks to demand for its artificial-intelligence products.
Broadcom and Nvidia were the two heaviest weights on the S&P 500 Tuesday.
Pfizer helped limit the losses after rising 4.4%. It gave a forecast for profit next year that was stronger than some analysts’ estimates. Other health care stocks were also at the front of the market, including gains of 1.1% for Johnson & Johnson and 1.2% for Baxter International.
In stock markets abroad, London’s FTSE 100 fell 0.8% ahead of an announcement on interest rates by the Bank of England on Thursday.
Japan’s central bank will also meet on interest rates later this week, and Tokyo’s Nikkei 225 slipped 0.2%. Unlike others around the world, the Bank of Japan is raising rates after keeping its policy rate below zero for years.
Bitcoin set a record above $108,000 before pulling back toward $106,700, according to CoinDesk.com. It's catapulted from roughly $44,000 at the start of the year, riding a recent wave of enthusiasm that will create a system that’s .
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AP Business Writer Elaine Kurtenbach contributed.
Stan Choe, The Associated Press
