The main indexes pulled back from record highs Tuesday as several mega-cap stocks declined. Market participants were also tuned into an early afternoon speech from Fed Chair Jerome Powell, who chimed in on the central bank's recent rate cut and stock valuations.
At the close, the tech-heavy Nasdaq Composite was down 1% at 22,573, the broader S&P 500 was off 0.6% at 6,656, and the blue chip Dow Jones Industrial Average was 0.2% lower at 46,292.
Artificial intelligence (AI) heavyweight Nvidia (NVDA) was one of the worst Dow Jones stocks today, shedding 2.8% as investors took profits off the table. But fellow Magnificent 7 stock Amazon.com (AMZN) was at the bottom of the pack with its 3% loss – sparked by news the company is closing all of its U.K. grocery stores.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Still, the main indexes remain near record highs and are poised to close the historically tough month of September with notable gains.
Powell says stock valuations are high
Federal Reserve Chair Powell chimed in on last week's rate cut and stock valuations during today's speech at the Greater Providence Chamber of Commerce in Rhode Island – his first appearance since the September Fed meeting.
Powell reiterated that the Fed faces a "challenging situation," given near-term risks to inflation "are tilted to the upside," while "risks to employment are to the downside."
He noted that even with last week's rate cut, the federal funds rate is "still modestly restrictive," but leaves the central bank "well positioned to respond to potential economic developments." Still, he failed to provide any color of future policy moves.
The Fed chair was also asked how much emphasis the central bank puts on market prices. Powell said that committee members "do look at overall financial conditions, and we ask ourselves whether our policies are affecting financial conditions in a way that is what we’re trying to achieve."
But while Powell noted that "by many measures … equity prices are fairly highly valued," he added that this is "not a time of elevated financial stability risks."
Palantir has more room to run, says BofA
Looking elsewhere on Wall Street, Palantir Technologies (PLTR) rose 1.8% after BofA Securities analyst Mariana Perez Mora reiterated her Buy rating on the tech stock and raised her price target to $215 from $180 – representing implied upside of nearly 20% to current levels.
"Palantir is leveraging on Agentic AI to extend the FDE [fully developed engineers] capabilities to more use cases," the analyst writes in a note to clients. "The AI FDEs will accelerate growth."
And on the government front, she notes that the $1 billion contract with the U.K. Ministry of Defence (MOD) "builds on Palantir's momentum as the global digital battle-management system."
PLTR is already up almost fivefold year over year, making the multibagger one of the best-performing S&P 500 stocks of the past 12 months.
AutoZone slips after earnings
AutoZone (AZO) edged down 0.02% even after the auto parts retailer posted lower-than-expected fiscal fourth-quarter earnings and revenue. The company cited higher costs related to tariffs as one headwind – and it expects this trend to continue in its new fiscal year.
Despite the disappointing earnings results, Wall Street continues to believe AZO is a top-notch stock.
Of the 26 analysts covering the consumer discretionary stock who are tracked by S&P Global Market Intelligence, 18 say it's a Strong Buy, four have it at Buy, three rate it at Hold and one says it's a Strong Sell. This works out to a consensus Buy recommendation.
Related content
- How Different Generations Invest and What They Can Teach You
- Four Ways to Invest in Quantum Computing
- I'm 55 With 10 Years Until Retirement and I've Made $2 Million on Nvidia Stock. What Do I Do With It Now?
-
Dow Adds 587 Points as Stocks Bounce: Stock Market TodayThe main indexes rebounded sharply Monday after President Trump took a calmer stance toward China.
-
Retirement Road Trips with Your Dog or Cat: How to Keep Your Pet Safe and HappyHitting the road for a retirement adventure with your pet? Check out these tips to keep your furry friend happy and safe on the journey!
-
Dow Adds 587 Points as Stocks Bounce: Stock Market Today
The main indexes rebounded sharply Monday after President Trump took a calmer stance toward China.
-
Are You a Small Business Owner Buckling Under Economic Pressure? Here's How You Can CopeSignificant emotional and financial challenges, including tariff worries, are piling up on small business leaders. Here's how leaders can develop more healthy coping strategies and systems of support.
-
To Raise Prices or Not to Raise Prices: Tariff Tips for Small BusinessesSmall businesses are making critical decisions. Should they pass on higher costs due to tariffs, or would that only cost them more in lost customers?
-
Five Retirement Planning Traps You Can't Afford to Fall Into, From a Wealth AdviserTo help ensure you reach your savings goals and enjoy financial security in your golden years, be aware of these common pitfalls. The key is to be proactive, informed and flexible.
-
Your 401(k) Can Now Include Alternative Assets, But Should It? A Financial Adviser Weighs InMany employer-sponsored plans offer limited investment options, which can stunt growth. But participants considering alternatives might need some sound advice to get the most from their accounts.
-
Will Taxes Shred Your 401(k) or IRA During Your Retirement? It's Very LikelyConventional wisdom dictates that you save in a 401(k) now and pay taxes later, but turning that rule on its head could leave you far better off. A financial planner explains why.
-
More Retirees Are Renting: Should You? A Financial Adviser Weighs InIn some ways, renting is cheaper, more flexible and easier, but unless you understand the implications for your taxes and health costs, it might not be for you.
-
Dow Dives 878 Points on Trump's China Warning: Stock Market TodayThe main indexes erased early gains after President Trump said China is becoming "hostile" and threatened to cancel a meeting with President Xi.
