US stocks fell on Wednesday as Wall Street digested mixed messaging from Fed officials on interest rates.
The S&P 500 (^GSPC) slid 0.3% while the Dow Jones Industrial Average (^DJI) declined by about 0.4%, The tech-heavy Nasdaq Composite (^IXIC) dropped 0.3%. The declines marked a reversal from the indexes' earlier gains.
Debate over the prospects for US interest rate cuts — the big focus for markets right now — appeared to pressure stocks. Comments from Federal Reserve officials this week have hinted at growing disagreement on what the path of policy should be, given cracks showing in the labor market.
Fed Chair Jerome Powell reiterated in a speech on Tuesday that the central bank would proceed cautiously on further rate cuts, even as he left the door open to more easing. He also described stocks as "fairly highly valued."
Wall Street is now counting down to the release of the Fed's preferred inflation gauge, the Personal Consumption Expenditures index, on Friday. Markets are watching for reassurance that inflation isn't posing a threat to high expectations for two more rate cuts this year.
On Wednesday, fresh data from the Commerce Department's Census Bureau showed new home sales unexpectedly surged in August as mortgage rates began to ease, bringing homebuyers off the sidelines and releasing pent-up demand. Still, affordability concerns persist.
Meanwhile, some tech stocks are showing gains despite a broader drop across the Nasdaq, which snapped a winning streak on Tuesday amid losses for the "Magnificent Seven" Big Tech stocks.
Alibaba stock (BABA) jumped 8% as investors welcomed the Chinese tech giant's pledge to hike its AI spending beyond its original $50 billion target. The boost is needed for Alibaba to keep pace as global investment in AI surges to $4 trillion, its CEO said.
Tesla (TSLA) shares climbed 4% and were on track to close at their highest level in 2025 as analysts at investing firm Mizuho Securities lifted their price outlook on the stock to $450. The analysts noted the EV maker is seeing only a "muted" impact from tariffs and boosted optimism for the company's robotaxi ambitions.
At the same time, Micron's (MU) stronger-than-expected quarterly earnings delivered a positive signal for the AI trade, though shares in the memory chipmaker — which supplies semiconductors for Nvidia's (NVDA) AI systems — fell on Wednesday.
LIVE COVERAGE IS OVER
25 updates
[SRC] https://finance.yahoo.com/news/live/stock-market-today-nasdaq-dow-sp-500-rise-as-alibaba-spreads-ai-cheer-230354917.html
