Stock market today: S&P 500 closes lower as Nvidia, big tech stumble

Investing.com-- The S&P 500 closed lower Tuesday after hitting a record high as big tech including Nvidia took a breather and investors digested remarks from Federal Reserve Chair Jerome Powell signaling a wait-and-see approach to further rate cuts 

At 4:00 p.m. ET (20:33 GMT), the Dow Jones Industrial Average fell 88 points, or 0.2%, while the S&P 500 fell 0.6%, though had hit another intraday record of 6,699.52. The NASDAQ Composite dropped 1%.

Powell signals cautions approach to further cuts; U.S. manufacturing, services activity slips  

Powell largely reiterated his remarks from last week’s press conference when the Fed cut rates, saying the central bank faces a challenging situation amid "near-term risks to inflation are tilted to the upside and risks to employment to the downside." 

"When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate," Powell said, adding that Fed’s policy is "not on a preset course."

The Fed cut rates by a largely telegraphed 25 basis points last week and flagged at least two more cuts this year, citing weakness in the labor market. But Powell warned that sticky inflation and resilience in jobs could raise questions over further easing. 

A number of Fed members warned on Monday that the central bank’s recent cut diminished the need for further easing, but recently-confirmed Fed Governor Stephen Miran on Monday called for aggressive reductions. 

Additionally, Federal Reserve Bank of Chicago President Austan Goolsbee said earlier Tuesday that interest rates could be reduced if inflation continues to cool down.

"I think eventually, at a gradual pace, rates can come down a fair amount if we can get this stagflationary dust out of the air," Goolsbee told CNBC in an interview.

Markets are now placing a roughly 90% chance of a quarter-point reduction in the Fed’s target rate from the current range of 4% to 4.25% at the central bank’s next meeting in October, according to CME’s closely-monitored FedWatch Tool. There is also about a 75% chance of another 25-basis point cut at the following gathering in December.

Aside from Fed speakers, attention will home in on flash U.S. business activity figures for September.

The S&P Global’s composite purchasing managers index for the month slipped to 53.6 in September, down from a reading of 54.6 last month, and missing economists expectations for 54.6.

Manufacturing sector PMI edged down to 52 from 53.0, just missing forecast of 52.2, while the gauge of the services industry -- which accounts for much of U.S. output -- inched lower to 53.9 from 54.5.

Nvidia takes breather as big tech stalls

NVIDIA Corporation (NASDAQ:NVDA) and other big tech names including Apple took a breather from their recent melt-up, weighing on the broader market. The AI chip leader announced a day earlier that it had agreed to a tie-up with OpenAI to invest up to $100 billion in and supply it with data center chips.

Kenvue (NYSE:KVUE) stock soared, rebounding after a record low the day before, even as U.S. President Donald Trump linked its Tylenol drug to autism risk during pregnancy at a White House press conference.

Firefly Aerospace (NASDAQ:FLY) stock slumped on the back of its financial results, the first to come out since the rocket maker’s Nasdaq debut in early August. It posted a wider loss and lower-than-expected revenue in its second quarter.

Peter Nurse, Ambar Warrick contributed to this article