Wall Street drifts as the wait begins for the Federal Reserve
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Wall Street drifts as the wait begins for the Federal Reserve
NEW YORK (AP) — U.S. stocks are drifting Tuesday as some of Wall Street’s mania around artificial-intelligence technology cools.
The S&P 500 was 0.2% lower in early trading. The Dow Jones Industrial Average was up 42 points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.6% lower.
Nvidia, whose chips are powering much of the move into AI, fell 1.9% after unveiling new products at its developers’ conference. Analysts called them powerful and said they would keep Nvidia ahead of competitors, but its stock has already shot up more than 240% over the last year.
Super Micro Computer, whose stock went from less than $100 to more than $1,000 in a year, sank 9.2%. The seller of server and storage systems used in AI and other computing, said it’s looking to sell 2 million more shares of its stock.
Shares of Unilever that trade in the United States rose 2.6% after it said it was spinning off Ben & Jerry’s and other ice cream businesses and cutting 7,500 jobs.
Elsewhere on Wall Street, the waiting game is on to hear from the Federal Reserve about where interest rates may be heading.
The Fed is beginning its latest meeting on interest rates, and it will announce its decision on Wednesday. The widespread expectation is for it to leave its main interest rate alone at a two-decade high. The hope is that it will indicate it still expects to cut rates three times later this year, as it hinted a few months ago.
U.S. stock indexes have set records recently partly on hopes for such cuts, which would relieve pressure on the economy and financial system. But several hotter-than-expected reports on inflation recently have hurt such hopes and already forced traders to give up earlier expectations that the year’s first cut would arrive Wednesday.
Treasury yields eased in the bond market ahead of the announcement. The yield on the 10-year Treasury slipped to 4.31% from 4.33% late Monday.
High yields and interest rates can hurt prices not only for stocks but also for cryptocurrencies.
Bitcoin’s price has been sliding since hitting a peak above $73,000 last week. It’s notorious for taking investors through severe swings in price, and it fell another 7% to drop below $63,300.
In stock markets abroad, Japan’s Nikkei 225 rose 0.7% after the Bank of Japan hiked its benchmark interest rate for the first time in 17 years. In a historic move, it moved the rate back to a range of zero to 0.1% and made other changes, ending a long experiment of rates below zero meant to boost the economy and inflation.
The era-defining move was widely expected, and it turns the dial in Japan from “extraordinary easing” to “normal” easing, according to economists at Bank of America.
Stocks fell 1.2% in Hong Kong and 0.7% in Shanghai after Troubled property developer China Evergrande Group said Beijing’s market watchdog fined it 4.2 billion yuan ($333.4 million) for allegedly falsifying its revenue, among other violations.
Stocks were mixed elsewhere in Asia and Europe.
