U.S. stock indexes declined on Tuesday, marking a pause in Wall Street’s recent rally. The S&P 500 fell by 0.6%, the Dow Jones Industrial Average dropped 88 points or 0.2%, and the Nasdaq composite decreased by 0.9%. This marks the first decline for these indexes after reaching all-time highs over the previous three days.
The market’s recent gains have drawn criticism that stocks may be overvalued following a surge since April. Federal Reserve Chair Jerome Powell commented on Tuesday that “stock prices broadly look ‘fairly highly valued.’”
Nvidia shares fell by 2.8%, reversing some of its gains from Monday when it announced a partnership with OpenAI to develop data centers. Other major technology companies also saw declines, with Amazon down 3% and Microsoft slipping by 1%.
Boeing’s stock rose by 2% after Uzbekistan Airways agreed to purchase 14 Dreamliner airplanes, with an option for eight more, helping offset some of the market’s losses.
Kenvue recovered slightly, rising by 1.6% after dropping on Monday due to concerns about comments from President Donald Trump regarding Tylenol and autism risk in children. Trump warned pregnant women about taking Tylenol but did not cite significant new research, and Kenvue has denied any link between its product and autism.
At the close of trading, the S&P 500 was at 6,656.92, down by 36.83 points; the Dow Jones Industrial Average ended at 46,292.78, down by 88.76 points; and the Nasdaq composite finished at 22,573.47 after losing 215.50 points.
Gold continued its upward trend and briefly surpassed $3,800 per ounce—a nearly 45% increase so far this year—driven partly by expectations that the Federal Reserve will cut interest rates to support a slowing job market in the United States.
Concerns about inflation remain due to White House influence on Fed policy decisions and high levels of government debt both in the U.S. and internationally.
Powell reiterated that “the Fed is stuck in an unusual position because worries about the job market are rising at the same time that inflation has stubbornly remained above its 2% target.” These were his first public remarks since last week’s interest rate cut—the first this year—by the central bank.
Fed officials anticipate further rate cuts through this year and into next but remain cautious as lower rates could fuel inflation.
A report expected Friday will provide an update on consumer price increases using the Fed’s preferred measure of inflation; economists predict it will show a slight acceleration for last month.
Preliminary data indicate U.S business activity continues to grow but at a slower pace as tariffs contribute to higher costs for companies who face challenges passing those costs onto customers amid weaker demand and strong competition according to S&P Global analysis.
Chris Williamson, chief business economist at S&P Global Market Intelligence said these figures suggest inflation could ease for households but is unlikely to fall below the Fed’s target soon.
In bond markets, Treasury yields moved lower with yields on ten-year Treasuries declining from Monday’s levels.
Internationally, stock markets showed mixed results across Europe and Asia: France’s CAC-40 gained while Hong Kong’s Hang Seng index declined; Japan’s markets were closed for a holiday.
