Wall Street indexes end lower as investors weigh Powell comments

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By Caroline Valetkevitch

NEW YORK (Reuters) -U.S. stocks finished lower on Tuesday, breaking a three-session string of record closing highs, as Federal Reserve Chair Jerome Powell said the U.S. central bank needs to balance inflation concerns with a weakening job market in its coming interest rate decisions.

The Nasdaq led declines, with shares of Nvidia falling 2.8% after rising in the previous session, when the chipmaker said it plans to invest up to $100 billion in OpenAI.

Amazon.com, Microsoft and Apple also were lower.

In comments Tuesday, Powell offered little hint of when he thinks the Fed might next cut interest rates. The Fed last week cut rates for the first time this year and indicated further cuts may be coming.

“The big event of the day was Powell’s speech. He was somewhat on the dovish side, but also he showed cautiousness, and that indicates that while he left the door open for another rate cut, there was really no hint of when and how much the next rate cut could be,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“The market began to sell off on that,” he said, adding: “It was also ripe for some sort of a pullback.”

Powell also said equity prices are fairly highly valued. The three major U.S. indexes registered record closing highs for the previous three sessions.

The Dow Jones Industrial Average fell 88.76 points, or 0.19%, to 46,292.78, the S&P 500 lost 36.83 points, or 0.55%, to 6,656.92 and the Nasdaq Composite lost 215.50 points, or 0.95%, to 22,573.47. 

Powell’s colleagues earlier gave comments on both sides of the policy argument.  Fed Vice Chair for Supervision Michelle Bowman said the Fed could downplay concerns about persistent inflation and needed to make a commitment to cut rates in support of the job market.

Helping to limit declines on the Dow, Boeing shares rose 2% after it secured an order from Uzbekistan Airways worth over $8 billion.

After the closing bell, shares of Micron Technology were up 0.7% as the company reported results and gave an upbeat forecast. The stock ended the regular session up 1.1%.

Declining issues outnumbered advancers by a 1.12-to-1 ratio on the NYSE. There were 561 new highs and 86 new lows on the NYSE.On the Nasdaq, 1,786 stocks rose and 2,871 fell as declining issues outnumbered advancers by a 1.61-to-1 ratio.

Volume on U.S. exchanges was 18.89 billion shares, compared with the 17.66 billion average for the full session over the last 20 trading days.

(Additional reporting by Niket Nishant, Purvi Agarwal, and Sukriti Gupta in Bengaluru; Editing by Maju Samuel)