FX.co ★ US Stocks Rally Pauses as Nvidia Slides, Fed Caution

On Tuesday, US stocks took a pause from their record-breaking rally as investors considered cautious remarks from Federal Reserve officials and expressed concerns about the sustainability of AI-driven trading. The S&P 500 declined by 0.5%, the Nasdaq 100 decreased by 0.7%, and the Dow Jones dropped 88 points. Nvidia saw a 2.8% slide following a surge on Monday, which was associated with its $100 billion investment in OpenAI. Investors were skeptical about the structure and energy requirements of this deal. Oracle and Amazon also experienced downturns, losing 4.1% and 3.1%, respectively. In contrast, Kenvue rose by 1.7%, countering losses from former President Trump's critique of Tylenol, and Boeing gained 2% following an $8 billion order from Uzbekistan Airways. Federal Reserve Chair Jerome Powell remarked on equity prices as "fairly highly valued," highlighting the difficulty of managing inflation risks alongside a weakening labor market. Other Fed officials echoed this caution, with Fed Vice Chair Goolsbee advising against reigniting inflation and Fed Governor Michelle Bowman suggesting that rate cuts could accelerate if job losses increase.