Stocks retreat as Fed decision looms

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Stocks pulled back on Tuesday from a rebound, as investors watched for the results from crucial Federal Reserve policy meeting.

The S&P 500 (^GSPC) slid roughly 0.2%, while the Dow Jones Industrial Average (^DJI) rose above the flatline, coming off a winning day for the major gauges. The tech-heavy Nasdaq Composite (^IXIC) dropped about 0.5% as Nvidia (NVDA) shares retreated in the wake of AI updates from its annual developer conference.

Attention is firmly on the Fed’s two-day meeting beginning Tuesday morning, seen as a test for stocks bruised by recent inflation surprises that undermined bets on interest-rate cuts coming soon.

With policymakers widely expected to keep rates at their historic highs, the focus is on the “dot plot” for any clues to the number and timing of any cuts this year. The central bank’s policy decision is due Wednesday at 2 p.m. ET.

Meanwhile, the Bank of Japan ended its era of negative rates with its first hike in 17 years, making a splash in a week packed with central bank decisions.

In cryptocurrencies, bitcoin (BTC-USD) continued to pull back from its recent record high, falling over 5% to hover above $63,000, on track for its biggest one-day loss in two weeks. Shares of crypto-linked companies Coinbase (COIN) and Marathon Digital (MARA) lost ground alongside the token.

On the corporate front, shares of Unilever (UL) popped after the Ben & Jerry’s maker said it would cut jobs and spin off its ice cream unit.

Live3 updates

  • Stocks slide before Fed meeting

    Wall Street pulled back some as Federal Reserve officials began their two-day huddle to decide their next move on interest rate policy.

    The S&P 500 (^GSPC) slid roughly 0.2%, while the Dow Jones Industrial Average (^DJI) rose above the flatline, coming off a win on Monday for the major indexes. The tech-heavy Nasdaq Composite (^IXIC) dropped about 0.5% as AI darling Nvidia (NVDA) retreated after sharing AI updates from its annual developer conference.

  • The bottom line on Nvidia

    Nvidia’s (NVDA) stock didn’t do too much on day one of its GTC conference despite an impressive array of new product introductions.

    But that doesn’t mean what the company unveiled was disappointing — quite the contrary! I actually think everything CEO Jensen Huang showed off is so complex, it could take a few days for investors to digest and assess if the stock warrants another push higher.

    Wall Street was pleased with what they heard.

    Here’s what JPMorgan analyst Harlan Sur had to say:

    “Overall, the team is further distancing itself with its aggressive cadence of new product launches and more product segmentation over time. With leading silicon (GPU/DPU/CPU), hardware/software platforms, and a strong ecosystem, Nvidia is well positioned to continue to benefit from major secular trends in AI, high-performance computing, gaming, and autonomous vehicles, in our view. Bottom line: NVIDIA continues to be 1-2 steps ahead of its competitors.”

  • The AI stock bubble…or not

    As Nvidia’s (NVDA) GTC conference continues out on the West Coast, it feels natural for BofA’s new fund manager survey out today to weigh into the AI stock bubble debate.

    The end result: institutional investors have no clue if this is a bubble!

    AI stock bubbleAI stock bubble

    Investors can’t decide whether AI stocks are in a bubble.

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