U.S. stocks and indices fell slightly on Wednesday, consolidating after reaching record highs, with attention focused on upcoming signals from the Federal Reserve regarding interest rates.
The S&P 500 and the Dow Jones Industrial Average hit record highs on Tuesday, continuing the optimism triggered by the Fed’s interest rate cut the previous week.
Powell Speech and PCE Data in Focus
However, sentiment weakened after a Conference Board report revealed that U.S. consumer confidence unexpectedly fell in September due to concerns about the labor market.
Several Federal Reserve officials, most notably Chairman Jerome Powell on Thursday, are likely to provide further signals on the bank’s plans to cut interest rates.
Fed Governor Adriana Kugler will be in the spotlight on Wednesday.
On Tuesday, Fed Governor Michelle Bowman defended her decision to vote against a significant cut of about 50 basis points in interest rates, instead supporting a traditional quarter-percentage-point reduction, citing that key inflation readings remain uncomfortably above the Fed’s target level.
The Fed cut rates by 50 basis points the previous week and announced the start of an easing cycle, which analysts estimate could reduce rates by about 125 basis points this year.
Friday will bring data on the PCE price index, the Fed’s favorite inflation gauge, which will most likely influence the bank’s plans for interest rates.
Nvidia Cools Off After Strong Session
Shares of Nvidia (NVDA), the largest artificial intelligence company, were flat in premarket trading after rising more than 3% on Tuesday.
The stock was supported primarily by news that CEO Jensen Huang had completed the sale of more than $700 million worth of Nvidia shares under a trading plan.
Huang’s share sale may have dented confidence in the company, even more so after quarterly results failed to meet estimates and delays in its advanced artificial intelligence chips.
Crude Oil Falls
Crude oil prices fell on Wednesday as traders reassessed the effect of new monetary stimulus measures from major importer China. On Tuesday, both benchmarks were up just under 2% after China unveiled its new stimulus measures. However, traders have noted that more help may be needed to boost economic expectations in the world’s largest crude importer, Reuters reports.
The decline in U.S. crude stockpiles provided some support to the market, as data from the American Petroleum Institute indicated on Tuesday that crude inventories fell by 4.34 million barrels the previous week. Official figures from the Energy Information Administration will be released later this week.
