Wall Street’s main indexes closed slightly lower on Wednesday after a U.S. inflation reading came in hotter than expected, while many investors stuck to the sidelines ahead of AI bellwether Nvidia’s earnings later in the day. A Commerce Department report showed annual U.S. inflation increased 3.7% in the 12 months through July, a touch above expectations. Separate data showed the economy grew 1.5% in the second quarter. The latest print added another wrinkle to the Federal Reserve’s policy outlook, raising the stakes for upcoming economic data. Investors will focus sharply on Fed Chair Kevin Warsh’s Jackson Hole speech on Friday.
The central bank’s next scheduled meeting is in September, putting the policy decision in focus during what is historically a weak month for equities. Odds of an interest rate hike at that meeting stand at 38.1%, according to the CME FedWatch tool.
The Dow Jones Industrial Average .DJI .DJI fell 113.52 points, or 0.21%, to 53,463.88, the S&P 500 .SPX .SPX lost 1.58 points, or 0.02%, to 7,675.70 and the Nasdaq Composite .IXIC .IXIC lost 21.10 points, or 0.08%, to 26,130.20.
Nvidia NVDA.O NVDA.O shares were down 1.6% ahead of its closely watched quarterly update. Anything less than a stellar report from the chip giant could rekindle doubts about the sustainability of the AI boom. Shares in cybersecurity firm CrowdStrike CRWD.O CRWD.O were up 2% ahead of second-quarter results, due out after closing bell.
On the S&P 500, healthcare stocks .SPHXC .SPHXC were the biggest laggards, down 1%. Moderna MRNA.O MRNA.O fell 5.8%, after strong gains on Tuesday although the stock remained well above the levels before the company disclosed a late-stage cancer vaccine trial data last week, alongside Merck MRK.N MRK.N .
Meta META.O META.O rose almost 1.1% and was leading gains among megacaps after it agreed to pay up to $18 billion and make major changes to Facebook and Instagram to resolve U.S. states’ claims of harm to children. Apple AAPL.O AAPL.O gained 1.1%. Shares of Intuit INTU.O INTU.O fell 3.2% after the TurboTax maker forecast annual revenue below Wall Street expectations. J.M. Smucker SJM.N SJM.N gained 4.3% after the Folgers coffee maker forecast a smaller-than-expected decline in annual sales.
Meanwhile, a report, citing Iran’s Revolutionary Guards spokesperson, said Tehran and Oman have reached agreements on their share of the Strait of Hormuz and its revenue. Worries over stubbornly high oil prices, rising government debt and inflation expectations had pushed Treasury yields to multi-year highs last week, although they retreated after the Treasury Department announced support measures.
Declining issues outnumbered advancers by a 1.16-to-1 ratio on the NYSE. There were 144 new highs and 66 new lows on the NYSE. On the Nasdaq, 1,983 stocks rose and 2,745 fell as declining issues outnumbered advancers by a 1.38-to-1 ratio. The S&P 500 posted 11 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 68 new highs and 75 new lows. Volume on U.S. exchanges was 14.2 billion shares, compared with the 16.2 billion average for the full session over the last 20 trading days.
Reporting by Purvi Agarwal and Niket Nishant in Bengaluru and Saeed Azhar in New York; Editing by Shilpi Majumdar and David Gregorio.
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