FX.co ★ US Stocks Retreat as Fed Caution and AI Concerns Weigh

In the afternoon trading session, U.S. stocks experienced a decline following an impressive rally, as investors considered cautious statements from Federal Reserve officials and expressed worries about the longevity of the artificial intelligence sector's growth. The S&P 500 decreased by 0.6%, the Nasdaq 100 by 0.8%, and the Dow Jones was down by more than 100 points. Nvidia fell over 3% after its Monday surge linked to a $100 billion investment in OpenAI, as investors scrutinized the deal's structure and its energy requirements. Additionally, Oracle and Amazon saw declines of 4.6% and 2.8%, respectively. Conversely, Kenvue saw a 2.8% increase, recovering some ground following criticism of Tylenol from Trump, while Boeing rose 1.5% thanks to an $8 billion order from Uzbekistan Airways. At the same time, Federal Reserve Chairman Jerome Powell noted that equity prices appeared "fairly highly valued" and discussed the difficulty of balancing inflation concerns with weaknesses in the labor market. Other Federal Reserve officials shared similar caution. Fed's Austan Goolsbee advised against actions that could reignite inflation, and Michelle Bowman indicated that if job losses increase, rate cuts might speed up.