STORY: U.S. stocks finished mostly lower on Tuesday, with the Dow ending essentially flat, the S&P 500 dropping about six-tenths of a percent, and the tech-heavy Nasdaq losing nearly one-and-a-half percent.
Investors are focused on the Federal Reserve's annual symposium in Jackson Hole, Wyoming, this week, culminating in remarks on Friday from Chair Jerome Powell.
And that has them on edge, according to Melissa Brown, managing director of investment decision research at SimCorp.
“I think things [stocks] may be heading south today because possibly the prospect of the Fed cutting rates or discussing cutting rates at the meeting on Friday, maybe there's a little less chance of that. I've seen a lot of commentary recently about the, that there's really not a huge need to cut rates, that the economy is reasonably strong. And what many economists are are more worried about is inflation.”
Despite that, interest rate futures point to a total of two 25-basis point rate cuts this year, with the first expected in September, according to data compiled by LSEG.
Among Tuesday's stock movers were megacaps, which lost ground after rallying much of the year, with AI darling Nvidia shedding 3.5%, its biggest drop in nearly four months.
Some market participants have expressed concerns about AI-related stocks after OpenAI's CEO Sam Altman said they are in a bubble in an interview with “The Verge” late last week.
Shares of Intel jumped roughly 7% after the chipmaker got a $2 billion capital injection from Japan's SoftBank Group.
And shares of Palo Alto Networks rose 3% after the cybersecurity company forecast fiscal 2026 revenue and profit above estimates.
