The main stock indexes experienced a retreat from record highs on Tuesday, with several major technology stocks contributing to the decline. Investors were closely monitoring a mid-afternoon speech delivered by Federal Reserve Chair Jerome Powell, who addressed recent interest rate cuts and current stock valuations. By the end of trading, the tech-focused Nasdaq Composite fell by 1%, closing at 22,573, while the broader S&P 500 decreased by 0.6% to 6,656. The Dow Jones Industrial Average finished the day down by 0.2%, ending at 46,292.
Among the notable decliners was Nvidia (NVDA), a key player in the artificial intelligence sector, which dropped 2.8% as investors cashed in on profits. Amazon.com (AMZN) led the pack in losses, dropping 3% after the announcement of plans to close all its U.K. grocery stores.
Despite the pullback, the main indexes continue to hover near their all-time highs, positioning them for significant gains as the historically volatile month of September comes to a close.
In his speech at the Greater Providence Chamber of Commerce in Rhode Island—his first since the September Federal Reserve meeting—Powell discussed the complex landscape facing the Fed. He stated that inflation risks remain elevated while employment risks are leaning towards the downside. Although last week’s rate cut was a move toward easing, Powell emphasized that the federal funds rate remains “modestly restrictive,” enabling the Fed to respond effectively to emerging economic trends.
Powell acknowledged that his committee monitors overall financial conditions closely and considers whether current policies are achieving intended outcomes in the markets. He stated that while equity prices are perceived as fairly high by many standards, the current financial environment does not indicate elevated risks to stability.
In a positive turn for Palantir Technologies (PLTR), shares increased by 1.8% after analyst Mariana Perez Mora from BofA Securities reiterated a Buy rating for the stock, raising the price target from $180 to $215. This marks a nearly 20% potential upside from current prices. The rise comes on the back of Palantir’s advancements in utilizing Agentic AI technology to broaden its applicable use cases, alongside a significant $1 billion contract with the U.K. Ministry of Defence, strengthening its positioning in the digital battle-management space. With nearly fivefold growth year-over-year, Palantir remains one of the standout performers in the S&P 500 over the past year.
On a different note, AutoZone (AZO) saw a slight decline of 0.02% following the release of its fiscal fourth-quarter earnings, which fell short of analysts’ expectations. The retailer cited increased costs from tariffs as a contributing factor and anticipates ongoing challenges in its upcoming fiscal year. Nevertheless, analysts remain optimistic about AutoZone, with 18 out of 26 tracking it as a Strong Buy, ensuring that it retains its reputation as a solid investment within the consumer discretionary space.
