Stock market today: Nasdaq clinches record, Dow, S&P 500 dip as Fed cuts rates, Powell downplays December cut

US stocks ended mixed on Wednesday after the Federal Reserve's decision to cut interest rates for the second time this year. Stocks erased some momentum after Fed Chair Jerome Powell indicated a December rate cut is "far from" a forgone conclusion.

The S&P 500 (^GSPC) ended the day down fractionally, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.5% to notch another fresh all-time high. The Dow Jones Industrial Average (^DJI) slipped 0.2%.

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The central bank delivered a quarter-point rate cut on Wednesday afternoon, but Powell was reluctant to signal anything about December as the bank navigates a "fog" from the lack of economic data due to the government shutdown.

"A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it," Powell said.

The central bank's divisions were also on full display in Wednesday's decision: President Trump’s newest appointed governor, Stephen Miran, disagreed with the decision, preferring to cut rates by half a percentage point. Kansas City Fed president Jeff Schmid also dissented, favoring holding rates steady.

Meanwhile, Nvidia (NVDA) stock jumped to a fresh record after President Trump stoked optimism for an easing in the curbs that have weighed on its sales in China. Trump said he may bring up Nvidia's Blackwell AI processors in his highly anticipated meeting with Chinese President Xi on Thursday.

The gains pushed the AI chipmaker's market value above $5 trillion, making it the first company in history to pass that milestone. The upswing comes after Nvidia shares closed at a record high on Tuesday as investors welcomed a flood of announcements from its GTC event.

The countdown is now on for earnings from "Magnificent Seven" tech megacaps, led out after the bell on Wednesday by reports from Alphabet (GOOG), Meta Platforms (META), and Microsoft (MSFT). Quarterly results from Apple (AAPL) and Amazon (AMZN) follow on Thursday.LIVE26 updates

14 mins ago

Ines Ferré

Stocks close mixed as Fed says December cut not guaranteed, Nvidia soars ahead of Microsoft, Meta earnings

US stocks closed mixed on Wednesday after the Federal Reserve cut interest rates for the second time this year, but Fed Chair Jerome Powell failed to reassure the market that another interest rate cut would be coming in December, saying that was not a "foregone conclusion."

The S&P 500 (^GSPC) closed flat. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) rose 0.5% to notch another record high as Nvidia (NVDA) stock rose to new records.

The Dow Jones Industrial Average (^DJI) slipped 0.15%.

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AI chipmaker Nvidia rose nearly 3% to close near a valuation of about $5 trillion. Investors will parse through earnings from Microsoft (MSFT) and Meta (META) due out in post-market trading. 58 mins ago

Allie Canal

Powell on the AI boom: 'This is different' from the dot-com boom and bust

Fed Chair Jerome Powell pushed back on comparisons between today’s AI-driven market rally and the 1990s dot-com bubble, arguing that the current tech leaders are grounded in real earnings growth and stronger fundamentals.

“This is different in the sense that these companies — the ones that are so highly valued — actually have earnings and stuff like that,” Powell said. “If you go back to the ’90s and the dot-com [era], these were ideas rather than companies. There was a clear bubble there.”

He stopped short of naming specific firms but noted that today’s leaders “actually have business models, profits, and earnings,” describing it as “really a different thing.”

Powell added that AI-related investments in data centers, chips, and infrastructure is one of the major drivers of economic growth right now. Still, he emphasized that consumer spending remains the larger force sustaining the economy.

“Consumer spending … is much bigger than that and has been growing,” he said. “It may be mostly higher-end consumers, but consumers are spending. That’s a big chunk of what’s going on in the economy — substantially bigger than AI.” Today at 7:08 PM UTC

Allie Canal

Powell: Fed watching recent layoffs 'very carefully'

Federal Reserve Chair Jerome Powell acknowledged growing signs of strain in the job market, including high-profile layoffs at Amazon (AMZN), UPS (UPS), and other corporate giants. But the Fed chair said the data has yet to indicate a broad deterioration in employment.

Powell said the Fed is “watching very, very, very carefully” as more companies announce hiring freezes or layoffs, often citing advances in artificial intelligence as a driving factor. He noted that many firms are either scaling back new hiring or cutting staff altogether, trends the central bank is monitoring closely.

Powell acknowledged that recent layoff announcements could eventually affect job growth, even though the impact hasn’t shown up in unemployment claims — at least not yet. He noted that such effects often take time to appear in the data, adding that the Fed is closely monitoring the situation.

Powell also pointed to signs of a “bifurcated economy,” where lower-income Americans are pulling back while higher earners continue to spend.

“There’s so much anecdotal data on that,” he said. “And so we think there’s something there.” Today at 7:00 PM UTC

Allie Canal

Powell said inflation not so far from Fed's 2% target, citing tariffs

Inflation may be stuck around 3%, but Fed Chair Jerome Powell says the story underneath the surface is more nuanced — and in some ways, closer to the central bank’s target than it appears.

At the post-decision press conference, Powell broke down the September CPI report and the factors driving prices higher, emphasizing that tariffs, rather than broad-based price pressures, are the primary culprit behind sticky goods prices.

“The September CPI report …was a little softer than expected,” Powell said. “Basically, you've seen goods prices increasing, and that's really due to tariffs. And that's compared to a longer-run trend of very, very mild deflation in goods. So that's moving inflation up.”

He added that housing inflation, which had long been a thorn in the Fed’s side, is finally showing sustained improvement.

“The housing services inflation has been coming down and is expected to continue to come down,” he said. “That leaves the biggest category … services other than housing services. And that's kind of been moving sideways over the last few months.”

Powell suggested that once you strip out the impact of tariffs, underlying inflation is running much closer to the Fed’s 2% target, likely around 2.3% to 2.4%, or just a few tenths of a percentage point above the goal.

"We're absolutely committed to returning inflation to 2%," he said. "If you look at longer-term surveys or market pricing, you will see that that's a credible commitment. And there should be no question that that's where we're going." Today at 6:44 PM UTC

Allie Canal

Powell: December cut is 'not a foregone conclusion'

Fed Chair Jerome Powell made clear that "no decision has been made" about whether the central bank will cut interest rates again in December.

“A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it,” Powell said during the post-decision press conference on Wednesday, adding that “policy is not on a preset course.”

That comment underscores the division within the Fed, as the decision came with two dissents — from Fed Governor Stephen Miran, who opposed the move because he wanted a larger 50 basis point cut, and Kansas City Fed president Jeff Schmid, who preferred to hold rates steady.

According to Powell, policymakers are grappling with “two-sided risks” with inflation risks tilted to the upside and labor market risks tilted to the downside.

Powell acknowledged there were “strongly differing views about how to proceed” among committee members.

Stocks dropped following the comments, as traders had been consistently pricing in another rate cut in December.

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Grace O'Donnell

Fed Chair Powell begins speaking...

Federal Reserve Chair Jerome Powell has begun speaking at the press conference following the central bank's decision to cut interest rates by 25 basis points. Read more about the decision here.

"Although some important federal government data have been delayed due to the shutdown, the public and private sector data that have remained available suggests that the outlook for employment and inflation has not changed much since our meeting in September," Powell began. "Conditions in the labor market appear to be gradually cooling, and inflation remains somewhat elevated."

For Powell's full comments, watch the livestream below or here: Today at 6:12 PM UTC

Ines Ferré

The Fed rate cut decision had 2 dissents for 2 different reasons

The Fed's decision on Wednesday had a 10-2 vote, with two members dissenting — but for different reasons.

Fed governor Stephen Miran opposed the cut because he wanted a bigger 50 basis point reduction.

Meanwhile, Kansas City Fed president Jeff Schmid, who voted for a cut in the last meeting, said he preferred not to cut rates at all this time around. Today at 6:00 PM UTC

Ines Ferré

Fed cuts benchmark interest rate by 25 basis points as expected

The Federal Reserve cut its benchmark interest rate by a quarter point on Wednesday, marking the second consecutive reduction this year as officials navigate policy decisions without much official government data.

While a cut today was baked into stocks, investors will be looking for clues from Fed Chair Jerome Powell during the press conference, which starts at 2:30 p.m. ET, about the future direction of the central bank's monetary policy and its dual mandate for the labor market and price stability. Today at 5:30 PM UTC

Laura Bratton

Alphabet set to report Q3 results as Wall Street weighs AI cloud deals, Google Search competition from OpenAI

Google parent company Alphabet (GOOG, GOOGL) is set to report its third quarter financial results after the bell Wednesday as investors scrutinize how the AI boom is helping — and potentially hurting — the tech giant.

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Alphabet is expected to report quarterly revenue of $99.85 billion, according to consensus estimates from Wall Street analysts tracked by Bloomberg, up 13% from $88.3 billion in the same period last year.

Analysts forecast the company will report adjusted earnings per share of $2.26 for the third quarter, a 7% increase from the company's $2.12 adjusted EPS in the year-ago period. That would represent its lowest earnings growth in more than two years, in part due to a recent antitrust fine from the European Commission.

Alphabet has increasingly shown that it's a beneficiary of the AI boom, as its Gemini AI models have gained popularity and big-name AI developers have signed up to use its cloud services. At the same time, AI chatbots led by OpenAI's (OPAI.PVT) ChatGPT pose risks to its core Search business.

Read the full story here. Today at 4:47 PM UTC

Grace O'Donnell

Fiserv stock plunges. New CEO launches an executive shakeup.

Yahoo Finance's David Hollerith reports:

Read more here. Today at 4:30 PM UTC

Grace O'Donnell

Caterpillar stock surges as Q4 outlook eclipses greater tariff impact

Caterpillar stock (CAT) surged over 12% on Wednesday, boosting the Dow, after the company reported a third quarter earnings beat and a better-than-expected fourth quarter outlook that outshone the increased impact from tariffs.

The mining and construction machinery maker recorded adjusted profits per share of $4.88, which was above analysts' estimates of $4.52, according to S&P Global Market Intelligence. The Energy & Transportation segment was a bright spot, with both sales and profits rising 17% versus the third quarter of 2024.

"With a record backlog, strong order rates, and continued growth in sales to users, our outlook has improved since last quarter," CEO Joseph Creed said. "For the fourth quarter, we anticipate strong sales growth versus the prior year."

However, Caterpillar said tariffs affected all three of its business segments during the quarter. Going forward, Caterpillar adjusted its forecast for tariff impacts to be between $1.6 billion and $1.75 billion for the full year. Previously, Caterpillar guided for a hit of $1.3 billion to $1.5 billion.

Read more live coverage of corporate earnings. Today at 4:15 PM UTC

Laura Bratton

Starbucks to report earnings as investors eye progress on turnaround efforts

Yahoo Finance's Brooke DiPalma reports:

Read the full story here. Today at 3:30 PM UTC

Laura Bratton

Amazon says Anthropic will use 1 million of its custom AI chips

Amazon (AMZN) said Wednesday that it has completed a massive data center project and that Anthropic (ANTH.PVT) is set to use 1 million of its custom chips by the end of 2025.

The news comes as AI chip competition heats up among Big Tech companies. Anthropic said last week it will use 1 million of Google's (GOOG, GOOGL) custom chips, called TPUs, or tensor processing units. That multibillion-dollar Google Cloud deal has raised questions about Amazon and Anthropic’s relationship going forward.

"It's a big deal for Amazon because there's this market perception and fear around ... whether or not they have the same infrastructure AI advantage Google has," Hedgeye Risk Management analyst Andrew Freedman said. He added that the deal likely represents multiple billions of dollars in annual revenue to Amazon Web Services.

Amazon shares fell fractionally Wednesday. The tech giant is set to report earnings after the bell Thursday. Alphabet stock climbed less than 1%, and the Google parent company will report earnings after the bell Wednesday.

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Read the full story here. Today at 2:43 PM UTC

Laura Bratton

Fed set to cut interest rates as government shutdown muddies data picture

Yahoo Finance's Jennifer Schonberger reports:

Read the full story here. Today at 2:10 PM UTC

Laura Bratton

Nvidia becomes first $5 trillion company in history as Trump comments, GTC reveal boost stock to new heights

Yahoo Finance's Dan Howley reports:

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Read more here. Today at 2:00 PM UTC

Karen Friar

The next chapter in OpenAI's dealmaking frees it to make even more

It didn't take long for OpenAI (OPAI.PVT) to get out from under Microsoft's (MSFT) shadow, writes Yahoo Finance's Hamza Shaban.

He reports in today's Morning Brief:

Read more here. Today at 1:43 PM UTC

Laura Bratton

Stocks rise at the open, eye fresh records

US stocks rose at the market open on Wednesday, headed toward fresh record closing highs.

The S&P 500 (^GSPC) added 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) gained roughly 0.7%. The Dow Jones Industrial Average (^DJI), which includes fewer tech names, also nudged up 0.3%.

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Stocks rose as investors awaited a policy decision from the Federal Reserve later in the day, amid high expectations for an interest-rate cut The Nasdaq led gains as Nvidia (NVDA) shares climbed, making the AI chipmaker the first $5 trillion company in history. Today at 1:04 PM UTC

Grace O'Donnell

Etsy taps insider as new CEO. The stock is tumbling.

Etsy (ETSY) stock dropped about 9% in premarket trading after the online marketplace announced a shake-up in its C-suite.

Etsy has tapped its current president and chief growth officer, Kruti Patel Goyal, to lead the company, replacing Josh Silverman, effective January 1. Silverman, who has been with the company for eight years, will transition to the executive chair role until his departure.

The company also said its board chair, Fred Wilson, who has served in that role since 2017, will step down as chairman but will continue to serve on Etsy's board.

Also on Wednesday, Etsy reported third quarter earnings that beat on the top and bottom lines, though slowing demand hurt the company's core sales. Read live coverage of corporate earnings here. Today at 12:15 PM UTC

Grace O'Donnell

Boeing posts Q3 revenue beat, improving cash flow burn rate as turnaround plan takes off

Yahoo Finance's Pras Subramanian reports:

Read more here. Today at 12:04 PM UTC

Karen Friar

Trump's team touts 'deal framework' with China. It's unclear what China will demand in return.

Yahoo Finance's Ben Werschkul reports:

Read more here.

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