US stocks were mixed on Tuesday as Wall Street digested fresh retail and inflation data ahead of next month’s highly anticipated Federal Reserve meeting. Investors are still riding the wave of Monday’s tech rally, the Nasdaq’s strongest session since May, but questions surrounding AI valuations and consumer strength dampened enthusiasm.
The Dow Jones Industrial Average climbed 0.5%, led by retail and industrial names. The S&P 500 hovered near unchanged, while the Nasdaq Composite slipped nearly 0.5%, dragged lower by chipmaker weakness. Even with Monday’s rebound, major indexes are pacing toward monthly losses, showing investors may be unwilling to keep paying top-dollar for growth stocks without clearer economic signals.
Market Movers:
- Kohl’s (KSS) +35%: Shares surged after the retailer beat earnings estimates for a third straight quarter and raised its full-year outlook, surprising analysts who expected continued sluggishness. Strong execution on its turnaround plan led to improved margins and a less severe sales decline than forecast.
- Symbotic (SYM) +27%: The AI-powered warehouse automation firm delivered a strong quarter, highlighted by rising revenue, wider margins, and a major swing to positive free cash flow. Guidance for next quarter exceeded expectations, showing continued momentum in large-scale supply chain automation.
- Keysight Technologies (KEYS) +9%: The testing and measurement company posted earnings well above estimates, driven by double-digit growth in communications demand. Keysight raised guidance and announced a $1.5 billion buyback program, signaling confidence in long-term demand for its semiconductor and wireless R&D tools.
- Zoom Communications (ZM) +8%: Zoom rallied after its quarterly outlook topped expectations and the company unveiled a $1 billion share buyback. Strong cash flow and stickier enterprise demand suggest the company is evolving beyond pandemic-era saturation.
- Spotify (SPOT) +3%: Gains followed reports of upcoming US price hikes set to begin in early 2026, marking the streamer’s first domestic increase since mid-2024. The higher subscription rate supports profitability goals following global price adjustments earlier this year.
- Burlington Stores (BURL) -12%: Shares tanked after weak same-store sales growth and a disappointing forecast that pointed to slumping store traffic after the back-to-school season. Management and analysts blamed unseasonably warm weather, flattening spending, and weaker foot traffic in key markets.
- Nvidia (NVDA) -6%: Nvidia fell sharply after reports that Meta may spend billions to adopt Google’s AI chips, potentially weakening Nvidia’s dominance. The news sparked competitive concerns in the AI hardware market, sending AMD slightly lower and lifting Alphabet’s shares.
Fed Cut Bets Surge as New Data Lands
Markets are now pricing in an 82% chance of a quarter-point rate cut in December, boosted by dovish comments from Fed governor Christopher Waller and other policymakers. But the incoming shutdown-delayed data offered a mixed picture: retail sales rose just 0.2% in September, and wholesale inflation ticked up 0.3%, complicating the Fed’s inflation narrative.
With October’s CPI scrapped entirely and GDP reports delayed, the Fed will be making its December decision without the standard economic visibility — a rare scenario that has left traders leaning more heavily on guidance from Fed officials than on the data itself.
Oil and Gas Prices Slide
Oil and natural gas extended their decline after reports suggested progress toward a revised peace plan between Ukraine and Russia. Brent crude fell below $62, and WTI slipped under $58, while natural gas sank nearly 6% on expectations of lower winter demand and record US production. Europe’s benchmark gas futures also hit their lowest level since May 2024, reflecting looser global supply conditions and easing geopolitical tensions.
Housing Market Shows Signs of Stabilization
Pending home sales rose 1.9% in October as mortgage rates dipped to their lowest level of the year. Activity improved in nearly all regions, particularly the Midwest, though year-over-year contract signings remain in negative territory. Economists note that any reversal in rate expectations could quickly disrupt the fragile recovery, making the Fed’s next move especially critical for housing.
Looking Ahead
With a shortened trading week and more delayed data arriving, volatility is likely to remain elevated. Investors are watching retail earnings from Best Buy and Kohl’s, fresh consumer confidence readings, and continued Fed commentary for clues about December’s policy decision. If rate-cut expectations hold and tech avoids further competitive shocks, markets may stabilize into year-end. But inflation pressures, AI chip rivalry, and geopolitical shifts remain key risks that could quickly shift sentiment.