Indexes down: Dow 0.31%, S&P 500 0.24%, Nasdaq 0.21%
Delta Air Lines shares rise on Q4 profit forecast
Albemarle gains on PT hike, China’s rare earth export controls
(Updates with late-morning trading)
By Niket Nishant and Sukriti Gupta
Oct 9 (Reuters) – Wall Street’s scorching rally took a pause on Thursday as investors, confronted with a lack of fresh catalysts, struggled to justify the lofty stock valuations fueled by the bull run.
While stocks have defied bubble concerns and held strong even during a seasonally weak stretch, some analysts worry that a swift pullback is on the cards if the U.S. Federal Reserve does not cut interest rates as aggressively as the markets expect.
Minutes from the central bank’s September meeting, released on Wednesday, showed lingering inflation concerns among policymakers.
New York Fed President John Williams told the New York Times that he backs more rate cuts this year. Investors will also tune in to remarks from Fed Board Governor Michael Barr and San Francisco Fed President Mary Daly.
Any hawkish tilt could weigh on equities, which have largely been buoyed by rate cut hopes and the artificial intelligence boom.
At 11:59 a.m. ET, the Dow Jones Industrial Average fell 145.34 points, or 0.31%, to 46,456.19. The S&P 500 lost 16.21 points, or 0.24%, to 6,737.51, while the Nasdaq Composite was down 47.72 points, or 0.21%, at 22,995.90.
The S&P 500 consumer discretionary stocks fell 0.9%, as Tesla slipped 1.9% and Amazon dipped 0.5%.
The U.S. National Highway Traffic Safety Administration said it was opening an investigation into 2.88 million of Tesla’s vehicles equipped with the Full Self-Driving system.
Tech stocks were flat. Apple, Microsoft and AppLovin fell 1.5%, 1% and 4.9%, respectively. The stocks also weighed on the Nasdaq.
The S&P 500 industrials sector fell 0.9%, with Boeing down 3.2% and Honeywell dropping 2.1%.
Yet, some analysts bet that the nearly three-year-old bull market might still have room to run.
“Public markets have shown striking resilience to the policy-driven volatility of recent months. That’s a reminder that investor appetite for high-quality growth remains robust, especially in tech,” said Isabelle Freidheim, founder of Athena Capital.
Another flicker of hope for risk assets could come from easing geopolitical tensions, as Israel and Hamas signed off on the first phase of a proposed Gaza peace deal.
Delta Air Lines shares jumped 5.1%. The airline provided an upbeat forecast for the current quarter, after posting stronger-than-expected third-quarter earnings.
PepsiCo rose 2.2% after the beverage giant topped Wall Street expectations for third-quarter revenue and profit.
Shares of U.S. homebuilders fell. Pultegroup and D.R. Horton declined 5.2% and 4.5%, respectively. They were among the top losers on the benchmark index.
Lithium producer Albemarle rose 7.2% after brokerage TD Cowen raised price target on the stock and as China tightened export controls on rare earths.
Declining issues outnumbered advancers by a 2.56-to-1 ratio on the NYSE and by a 1.53-to-1 ratio on the Nasdaq.
The S&P 500 posted 18 new 52-week highs and five new lows, while the Nasdaq Composite recorded 110 new highs and 42 new lows. (Reporting by Niket Nishant and Sukriti Gupta in Bengaluru; Editing by Devika Syamnath and Shilpi Majumdar)