Other Fed officials, led by Chair Jerome Powell, have been more hesitant. Powell has said he wants to wait for more data about how Trump’s tariffs are affecting inflation before the Fed makes its next move, and Tuesday’s update on the consumer price index may offer a big clue about that.
Strategists at Stifel are warning that stagflation may already be on the way, with spending by US consumers slowing. That in turn could create a reckoning for investors after they sent stock prices soaring to records from their low point in April.
“Rate cuts cannot save an overvalued S&P 500,” according to the strategists, led by Thomas Carroll and Barry Bannister.
One way companies can make their stock prices appear less expensive is to deliver bigger profits.
Micron Technology climbed 4.1 per cent after raising its forecasts for profit and revenue in the current quarter, which will end later this month. The maker of memory for computers said it’s benefiting from higher prices for its products.
Nvidia and Advanced Micro Devices slipped after a US government official confirmed that the two agreed to share 15 per cent of their revenues from chip sales to China with the US government. The two had said in July that Washington would allow them to resume sales of their advanced H20 and MI308 chips, which are used in artificial intelligence development, in China but didn’t reveal the 15 per cent cut. Nvidia lost 0.4 per cent, and AMD shed 0.3 per cent.
AMC Entertainment rose 3.4 per cent to trim its loss for the year so far, which came into the day at 26.4 per cent, after reporting better results for the spring than analysts expected. The theatre chain said moviegoers paid more for tickets, while also spending more on food and drinks.
TKO Group Holdings climbed 10.2 per cent after reaching a deal to distribute its UFC mixed martial arts matches on the Paramount+ streaming platform. But Paramount Skydance’s stock dropped 3.7 per cent.
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Also on the losing side of Wall Street was C3.ai after the AI application software company warned it may report an operating loss as large as $US124.9 million ($191.8 million) for its first quarter. CEO Thomas Siebel called the first-quarter sales results “completely unacceptable,” and its stock tumbled 25.6 per cent.
All told, the S&P 500 fell 16.00 points to 6,373.45. The Dow Jones Industrial Average dropped 200.52 to 43,975.09, and the Nasdaq composite slipped 64.62 to 21,385.40.
The price of gold, meanwhile, eased after Trump said he would not place tariffs on the metal. That followed Friday’s brouhaha in the gold market after the US Customs and Border Patrol seemed to rule that some kinds of gold bars coming from Switzerland would face a tariff. That in turn caused a disconnect between the prices of gold trading in New York versus in London, but the market has since calmed.
Gold for December delivery settled at $US3,404.70 per ounce in New York, down 2.5 per cent.
In stock markets abroad, indexes were mixed amid mostly modest movements across Europe and Asia.
In the bond market, the yield on the 10-year Treasury held at 4.27 per cent, where it was late Friday.
