NEW YORK — U.S. stock indexes ended mixed on Wednesday after Nvidia, Palantir and other superstar stocks pared most of their steep losses from the morning.
The S&P 500 dipped 0.2 per cent after trimming a loss that reached 1.1 per cent earlier in the day and remains near its an all-time high set last week. The Dow Jones Industrial Average added 16 points, or less than 0.1 per cent, and the Nasdaq composite fell 0.7 per cent.
The day’s action centered again around stocks caught up in the mania around artificial-intelligence technology.
Nvidia, whose chips are powering much of the world’s move into AI, sank as much as 3.9 per cent during the morning and was on track to be the heaviest weight on Wall Street following its 3.5 per cent fall on Tuesday.
But it clawed back nearly all of Wednesday’s drop and finished with a dip of just 0.1 per cent. As it pared its loss, so did broad market indexes because Nvidia is Wall Street’s most influential stock by being its most valuable.
Palantir Technologies, another AI darling, fell 1.1 per cent to add to its 9.4 per cent loss from the day before, but it had been down as much as 9.8 per cent Wednesday morning.
One possible contributor to the swoon was a study from MIT’s Nanda Initiative that warned that most corporations are not yet seeing any measurable return from their generative AI investments, according to Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management.
But the larger factor may be the simple criticism that prices for such stock simply shot too high, too fast amid the furor around AI and became too expensive. Nvidia, whose profit report scheduled for next week is one of Wall Street’s next major events, had soared 35.5 per cent for the year so far heading into Tuesday. Palantir had surged even more, more than doubling.
The tech stocks still have supporters, though, who say AI will bring the next generational revolution in business.
Mixed profit reports from big U.S. retailers helped keep the rest of the market in check.
TJX, the company behind the TJ Maxx and Marshalls stores, climbed 2.7 per cent after beating analysts’ forecasts for profit and revenue. It also raised its forecast for profit over its full fiscal year, while CEO Ernie Herrman said TJX is seeing “strong demand at each of our U.S. and international businesses” and that its current quarter is off to a strong start.
Lowe’s added 0.3 per cent after the home-improvement retailer delivered a profit for the latest quarter that topped analysts’ expectations.
Target, meanwhile, tumbled 6.3 per cent. The struggling retailer said that CEO Brian Cornell plans to step down Feb. 1 and that an insider, 20-year veteran Michael Fiddelke, will replace him. He helped reenergize the company, but it has struggled to turn around weak sales in a more competitive post-COVID retail landscape.
Estee Lauder dropped 3.7 per cent after offering a forecast for profit this upcoming fiscal year that fell short of Wall Street’s estimates. The beauty company said it expects tariffs to shave roughly US$100 million off its upcoming earnings.
La-Z-Boy sank 12.1 per cent after the furniture maker’s profit and revenue for the spring came up shy of analysts’ expectations.
All told, the S&P 500 fell 15.59 points to 6,395.78. The Dow Jones Industrial Average added 16.04 to 44,938.31, and the Nasdaq composite fell 142.10 to 21,172.86.
The week’s biggest news for Wall Street is likely arriving on Friday, when Federal Reserve Chair Jerome Powell will give a highly anticipated speech in Jackson Hole, Wyoming. The hope on Wall Street is that Powell will hint that cuts to interest rates are coming soon.
The Fed has kept its main interest rate steady this year, primarily because of the fear of the possibility that President Donald Trump’s tariffs could push inflation higher. But a surprisingly weak report on job growth across the country may be superseding that.
Treasury yields have come down sharply on expectations for an easing of interest rates, and the yield on the 10-year Treasury fell to 4.29 per cent from 4.30 per cent late Tuesday.
Trump has been angrily calling for lower interest rates, often insulting Powell personally while doing so. Trump on Wednesday called on a top official at the Federal Reserve, Lisa Cook, to resign after a member of his administration accused her of committing mortgage fraud.
In stock markets abroad, indexes were mixed across Europe and Asia.
London’s FTSE 100 rose 1.1 per cent despite a report that said inflation in the U.K. rose more than expected through July, in part due to soaring airfares and food prices.
Hong Kong’s Hang Seng added 0.2 per cent. Shares that trade there of Chinese toy company Pop Mart International Group soared 12.5 per cent after its CEO said its annual revenue could top US$4 billion this year and announced the release of a mini version of its popular Labubu dolls.
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Stan Choe, The Associated Press
AP Business Writers Yuri Kageyama and Matt Ott contributed.
