NEW YORK (AP) — U.S. stock indexes are edging lower on Thursday as Wall Street makes its final moves before the head of the Federal Reserve gives a highly anticipated speech on Friday that could hint at where interest rates are going.
The S&P 500 dipped 0.2% following four straight modest loss since it set an all-time high last week. The Dow Jones Industrial Average was down 101 points, or 0.2%, as of 10:35 a.m. Eastern time, and the Nasdaq composite was 0.1% lower.
Walmart was one of the market's biggest movers and fell 4.4% after reporting a profit for the spring that came up short of analysts' expectations, while Big Tech stocks were holding a bit steadier following two days of sharp swings.
The moves were a little stronger in the bond market, where Treasury yields rose after a report forced Wall Street to scale back hopes that the Federal Reserve may soon deliver relief by cutting interest rates.
The report suggested growth in U.S. business activity is accelerating and hit its fastest rate so far this year. That's good news for the economy, but the preliminary data from S&P Global also said tariffs helped push up average selling prices at the fastest rate in three years. That’s a discouraging sign for inflation.
Taken all together, such data has historically aligned more with the Federal Reserve considering a hike in interest rates, rather than a cut, according to Chris Williamson, chief business economist at S&P Global Market Intelligence.
Virtually no one expects a rate hike to happen soon, but the overwhelming expectation on Wall Street has been for coming cuts. Traders are betting on a three-in-four chance that the Fed will lower its main interest rate at its next meeting in September, according to data from CME Group. The hope on Wall Street has been that Fed Chair Jerome Powell may give some hints on Friday that easier rates may be coming.
He will be speaking in Jackson Hole, Wyoming, at an annual conference of central bankers that’s been home to big policy announcements in the past.
A cut in interest rates would be the first of the year, and it would give investment prices and the economy a boost by making it cheaper to borrow to buy houses, cars or equipment. But it could also risk worsening inflation.
The Fed has so far been hesitant to cut interest rates out of fear that President Donald Trump’s tariffs could push inflation higher, but a surprisingly weak report on job growth across the country earlier this month suddenly made the job market a bigger worry. Trump, meanwhile, has angrily been pushing for cuts to interest rates, often personally attacking Powell while doing so.
The yield on the 10-year Treasury rose to 4.32% from 4.29%. The two-year Treasury, which moves more on expectations for what the Federal Reserve will do with short-term interest rates, climbed to 3.77% from 3.74%.
On Wall Street, Walmart was one of the heaviest weights on the market following its profit report. It delivered encouraging growth in revenue and raised its forecast for profit over its full fiscal year, but analysts said the market’s expectations were high coming into the report.
The Bentonville, Arkansas, company’s stock came into the day with a gain of 13.5% for the year so far, well above the rest of the market.
Big Tech stocks are under even more pressure to deliver bigger profits amid criticism that their stock prices ran too high, too fast and have become too expensive because of the frenzy around artificial-intelligence technology.
Several AI superstar stocks have swung sharply this week, taking some shine off their skyscraping surges for the year, because of such criticism. But they were holding a bit steadier on Thursday.
Nvidia, the chip company that’s become the poster child of the AI boom, rose 0.2%. Palantir Technologies, which at one point on Wednesday was on track to fall more than 9% for a second straight day before paring its loss, slipped 0.3%.
Coty tumbled 19.4% after the beauty products company reported a loss for the latest quarter, when analysts expected a slight profit. The company, whose brands include CoverGirl and Joop!, said uncertainty about tariffs and the economy are making retailers cautious in their orders.
On the winning side of Wall Street was Nordson, which makes products and systems used for precision dispensing and other things. It delivered profit and revenue for the latest quarter that topped analysts’ expectations, and its stock rose 6.5%.
In stock markets abroad, indexes were mixed across much of Europe and Asia.
Germany, Europe’s largest economy, saw its DAX remain roughly flat after the U.S. and European Union officials offered a framework for their trade deal.
Japan’s Nikkei 225 fell 0.6% after a survey showed Japan’s factory activity contracted again in August.
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AP Writers Teresa Cerojano and Matt Ott contributed.
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