Stock market today: Wall Street slips and breaks an 8-day winning streak
AP Business Writer
NEW YORK (AP) — U.S. stocks ticked lower Tuesday and snapped an eight-day winning streak, the longest of the year.
The S&P 500 slipped 0.2%, but it’s still just 1.2% below its all-time high set last month. It has roared back from its scary summer drop, where the index briefly dropped nearly 10% below its record.
The Dow Jones Industrial Average fell 61 points, or 0.2%, and the Nasdaq composite slipped 0.3%.
Nvidia was the heaviest weight on the market after falling 2.1%. The chip company is one of Wall Street’s most influential stocks because a frenzy around artificial-intelligence technology has made it one of the U.S. stock market’s most valuable companies at roughly $3 trillion.
Nvidia has recovered most of its summertime swoon, where its stock dropped more than 20% on worries investors went overboard and took its price too high, but it has remained shaky ahead of its earnings report scheduled for next week.
Boeing also weighed on the market after sinking 4.2%.
Federal safety officials are requiring inspections of cockpit seats on Boeing 787 Dreamliners. Boeing also has stopped test flights of a new version of its 777 jetliner after discovering a damaged structural part between the engine and the rest of the plane. The new model has not yet been approved by regulators.
Helping to limit the market’s losses was Palo Alto Networks. The cybersecurity company jumped 7.2% after becoming the latest big business to report stronger profit and revenue for the latest quarter than analysts expected. Companies in the S&P 500 are on track to report their best growth in earnings per share since the end of 2021, according to FactSet.
Lowe’s likewise topped analysts’ forecasts for profit in the spring, but its stock was more restrained. The home improvement retailer said it’s facing a challenging economic backdrop, “especially for the homeowner,” and cut its forecasts for revenue and profit this fiscal year. Its stock fell 1.2%.
High interest rates have been weighing on the economy after the Federal Reserve hiked them sharply in order to get inflation under control. On Tuesday, Treasury yields eased ahead of a speech on Friday by Federal Reserve Chair Jerome Powell, one that’s likely to be the week’s highlight for financial markets.
The economic symposium in Jackson Hole, Wyoming, where Powell will be speaking has been home to big policy announcements in the past. Expectations aren’t that high this time around, with nearly everyone already in agreement the Fed will begin cutting interest rates next month.
The biggest question is whether the economy needs the Federal Reserve merely to remove the brakes or if it needs an extra boost requiring deeper and faster cuts.
A surprisingly weak report on hiring by U.S. employers last month raised worries the Fed has already kept interest rates too high for too long, but ensuing data on everything from inflation to sales at U.S. retailers helped bolster optimism.
The yield on the 10-year Treasury fell to 3.81% from 3.87% late Monday.
On Wall Street, the company behind Hawaiian Airlines soared 11.3% after it said its proposed merger with the company behind Alaska Airlines has cleared a major regulatory hurdle. A review period by U.S. antitrust regulators for the deal has passed.
Alaska Air Group’s stock was basically flat.
All told, the S&P 500 slipped 11.13 points to 5,597.12. The Dow dipped 61.56 to 40,834.97, and the Nasdaq fell 59.83 to 17,816.94.
In stock markets abroad, Japan’s Nikkei 225 jumped 1.8% to claw back all of its sharp loss from the day before. Tokyo has been home to some of the world’s most vicious moves for financial markets recently after the Bank of Japan raised interest rates there last month.
That hike triggered losses for markets around the world because it forced many hedge funds to abandon a popular trade all at once, where they had borrowed Japanese yen cheaply and invested it elsewhere. That included the worst day for Japan’s stock market since the Black Monday crash of 1987.
But an ensuing assurance from the Bank of Japan on interest rates has helped calm the market, along with the better-than-expected data on the U.S. economy.
The rebound for U.S. stocks following their scary couple of weeks is another reminder about the danger of trying to time the market. Anyone who sold their stock investments earlier this month when panic was high would have missed the recent eight-day winning streak for the S&P 500.
Historically, the market’s best and worst days tend to be bunched together, “often back-to-back” during recessions or down markets, according to Veronica Willis, global investment strategist at Wells Fargo Investment Institute.
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AP Business Writer Matt Ott contributed.
