Wall Street Slips After Record High as Fed Minutes Loom/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stock markets dipped Wednesday after the S&P 500’s record high, with the Dow dropping 163 points. Nikola plunged 45.4% after filing for bankruptcy, while Tesla gained 1%. Investors await the Federal Reserve’s meeting minutes for clues on future interest rate cuts amid persistent inflation concerns.
Wall Street Market Trends – Quick Looks:
- S&P 500: Slipped 0.2% after setting an all-time high the previous day.
- Dow Jones: Fell 163 points (0.5%), while the Nasdaq dropped 0.2%.
- Nikola shares: Plunged 45.4% after filing for Chapter 11 bankruptcy.
- Tesla stock: Rose 1%, benefiting from Nikola’s market exit.
- Celanese shares: Dropped 20% despite beating profit expectations, citing demand weakness.
- Toll Brothers: Fell 6.8% as affordability constraints hurt lower-end home sales.
- Treasury yields: 10-year yield edged up to 4.56% ahead of Fed minutes release.
- Global markets: European indexes declined over 1%; South Korea’s Kospi rose 1.7%.
Wall Street Slips After Record High as Fed Minutes Loom
Deep Look:
Wall Street Retreats from Record Highs as Investors Await Fed’s Rate Outlook
NEW YORK, NY – U.S. stock indexes edged lower Wednesday, pulling back from record territory as investors weighed mixed earnings reports and looked ahead to the Federal Reserve’s meeting minutes for insight on future interest rate decisions.
The S&P 500 dipped 0.2%, following Tuesday’s all-time high. The Dow Jones Industrial Average fell 163 points (0.5%) as of 9:35 a.m. ET, while the Nasdaq composite slipped 0.2% amid a quieter trading day.
Earnings Movers: Nikola Tanks, Tesla Climbs
A key drag on markets was Nikola, whose stock plummeted 45.4% after filing for Chapter 11 bankruptcy protection. The zero-emissions vehicle maker announced plans to sell off assets and cease operations. The collapse could benefit competitors, with Tesla rising 1% as it capitalized on Nikola’s market exit.
Chemical company Celanese dropped 20% despite exceeding fourth-quarter profit forecasts. CEO Scott Richardson warned of persistent demand deterioration in key sectors like automotive and construction, with no signs of near-term recovery.
Toll Brothers also struggled, declining 6.8% after reporting weaker-than-expected earnings. While high-end home sales remain robust, CEO Douglas Yearley Jr. noted “affordability constraints” are hampering lower-end purchases amid elevated mortgage rates.
Interest Rates and Inflation Under Scrutiny
Investors remain focused on the Federal Reserve’s January meeting minutes, set for release later Wednesday. The Fed paused its rate-cutting streak last month after three consecutive reductions, signaling fewer cuts in 2025 amid persistent inflation concerns.
The 10-year Treasury yield rose slightly to 4.56% from 4.55% Tuesday. Yields have fluctuated in recent months, climbing from below 3.70% in September to near 4.80% recently.
“Markets are trying to reconcile strong economic data with the Fed’s cautious approach,” said an analyst. “Rate cuts can stimulate growth but risk reigniting inflation.”
Global Markets Reflect Broader Economic Tensions
European markets faced sharp declines:
- London’s FTSE 100: Down 0.7% after U.K. inflation hit a 10-month high.
- Paris and Frankfurt indexes: Dropped over 1% as European Central Bank rate expectations shifted.
In Asia:
- South Korea’s Kospi: Rose 1.7%, buoyed by tech sector optimism.
- Japan’s Nikkei 225: Fell 0.3% amid profit-taking after recent gains.
Looking Ahead:
With the Fed minutes in focus and inflationary pressures lingering, investors remain cautious. Potential U.S. tariffs under President Donald Trump’s policies could further stoke inflation fears, adding volatility to bond yields and equities.
Markets will watch closely for economic data later this week, including housing starts, jobless claims, and global manufacturing reports, which could further influence rate expectations.
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