NEW YORK (AP) - The U.S. stock market is experiencing volatility as traders navigate through another unsettled trading day. On Wednesday, the S&P 500 index showed slight gains, adding 0.2% after fluctuating between minimal gains and a peak of 1.1% in the morning. This index is rebounding from a four-day losing streak, its longest in nearly three months, reflecting concerns that stock prices may have surged too high and that the Federal Reserve may slow down its anticipated cuts to interest rates.
As of 11:45 a.m. Eastern Time, the Dow Jones Industrial Average dropped 118 points, or 0.3%, while the Nasdaq composite increased by 0.5%. Constellation Energy emerged as a key player in the market, rallying 5.3% after the U.S. Department of Energy announced a $1 billion loan to help restart its nuclear power plant at Three Mile Island. Additionally, Lowe's also saw a 5.3% rise following a stronger-than-expected profit for the summer quarter.
These gains are tempered by a 0.8% decline for Target, which posted a stronger profit but reported weaker revenue than analysts had anticipated, indicating potential challenges leading into the crucial holiday shopping season.
The market's attention, nevertheless, remains sharply focused on Nvidia, a leading player in the stock market. Nvidia's shares climbed 2.1% as investors looked to recover some of the losses it faced earlier in the month, with losses exceeding 10% as of Tuesday. As the most influential stock on Wall Street, Nvidia's performance is crucial, and traders are keenly awaiting the company's earnings report on its summer profits post-market closure.
Nvidia has become synonymous with the broader excitement surrounding artificial intelligence (AI) technology, as many companies rely on its chips to enhance their AI capabilities. Prominent companies such as Palantir Technologies, Amazon, and Microsoft are heavily invested in this sector, contributing to recent records in the U.S. stock market, including the S&P 500's all-time high last month.
However, concerns are mounting that the significant investments in AI may not yield the expected profits and productivity, leading some critics to draw comparisons to the dot-com bubble that burst in 2000, consequently resulting in a near 50% drop in the S&P 500.
Traders are also preparing for the upcoming jobs report from the U.S. government, scheduled for release on Thursday. This report, which highlights job creation and losses for September, was initially delayed due to the federal government shutdown. Despite potential delays in data, the report is anticipated to impact Wall Street's outlook, particularly as it pertains to job market health. The job market has faced a slowdown this year, prompting the Federal Reserve to cut its main interest rate twice already.
The implications of the Fed's upcoming actions are significant, as the expectation for further rate cuts has been a driving force behind recent record highs in stock prices. However, some Fed officials hinted at the potential for a pause in rate cuts next month due to persistent inflation levels above the Federal Reserve's 2% target. Such a decision could complicate the outlook for investments, considering reduced interest rates typically stimulate economic activity and boost investment prices.
In the bond market, Treasury yields are fluctuating as traders adjust their projections for the Fed's overnight interest rate, with the yield on the 10-year Treasury easing to 4.10% from 4.12%. Meanwhile, stock markets overseas showed mixed results, reflecting modest movements across Europe and Asia.
Overall, as the market maneuvers through these uncertainties and pivotal announcements, investor sentiment remains delicate, with much depending on upcoming earnings reports and economic indicators.
