US stock indexes dipped after a three-day record-setting rally, with tech giants like Nvidia, Amazon, and Microsoft leading the decline. Concerns about high valuations and inflation persist, despite Boeing's gains and gold's continued surge.
U.S. stock indexes experienced a pullback on Tuesday, marking the end of a three-day streak of record highs. The S&P 500 fell 0.6%, the Dow Jones Industrial Average dropped 0.2%, and the Nasdaq composite sank 0.9%. This downturn follows recent criticism that the market's rapid ascent has made it overvalued. Even Federal Reserve Chair Jerome Powell commented that stock prices appear "fairly highly valued." Nvidia, after a significant gain the previous day, lost 2.8%, weighing on the market. Other tech giants, key drivers of the recent rally, also saw losses: Amazon fell 3%, and Microsoft slipped 1%. However, Boeing's 2% rise, fueled by a large airplane order from Uzbekistan Airways, helped mitigate overall losses. Kenvue, which had dropped sharply on Monday due to concerns about President Trump's comments on Tylenol and autism, recovered some ground, rising 1.6%. Trump warned pregnant women about Tylenol use but didn't provide significant new research to support his claims. Kenvue denied any link between the drug and autism. Gold continued its record-breaking rally, briefly exceeding $3,800 per ounce, driven by expectations of Fed interest rate cuts and concerns about inflation and high government debt. Powell reiterated the Fed's unusual position of balancing concerns about the job market and persistent inflation above its 2% target. The Fed anticipates further rate cuts this year and next but remains cautious about fueling inflation. An upcoming inflation report is expected to show a slight acceleration in prices, while data suggests business activity is slowing due to tariffs and weaker demand. Despite this, economists believe inflation may moderate but not enough to reach the Fed's 2% target soon. Treasury yields also decreased, with the 10-year Treasury yield falling to 4.11%. Global stock markets showed mixed results, with modest changes in Europe and Asia.
