US stocks were mixed on Tuesday as investors digested the first public comments from Federal Reserve Chair Jerome Powell since last week’s interest rate cut. The Dow Jones Industrial Average gained about 0.2%, while the S&P 500 dipped 0.1%. The Nasdaq Composite fell more than 0.3%, pressured by weakness in Big Tech following a record-setting streak.
Monday’s session saw all three indexes close at new highs, buoyed by optimism around AI investments and the Fed’s dovish pivot. On Tuesday, however, attention turned back to policy and economic data, with Powell’s remarks and fresh PMI figures painting a more complicated picture of growth and inflation.
Market Movers:
- Nvidia (NVDA) fell over 2% after reaching a record high yesterday on news of its $100 billion investment in OpenAI. The partnership, the largest AI infrastructure project in history, involves deploying up to 10 gigawatts of Nvidia’s chips for OpenAI by 2026. While analysts see the deal as transformative, some are concerned about the optics of Nvidia funding a customer at such a scale, raising questions about accounting treatment and OpenAI’s financial capacity.
- Oracle (ORCL) fell about 5% after rallying sharply on Monday when the White House confirmed the company’s role in a new TikTok venture. Investors locked in profits as the stock pulled back from recent highs, despite Oracle continuing to serve as the new venture’s data security provider. The drop also followed a leadership shakeup that saw two new co-CEOs replace longtime Chief Executive Safra Catz, adding uncertainty to the company’s next chapter.
- Better Home & Finance (BETR) soared nearly 40% in midday trading, extending a blistering two-day rally fueled by activist investor Eric Jackson’s endorsement. Jackson compared the company to the “Shopify of mortgages,” claiming it could be a “350-bagger” within two years. The bold call has sparked speculative interest in the little-known real estate platform, though analysts caution its valuation is already stretched after a nearly 80% gain in just two sessions.
- Plug Power (PLUG) added another 11% to its recent surge, bringing its five-day rally to nearly 70%. The fuel-cell maker is benefiting from growing optimism that green hydrogen will play a role in powering AI-focused data centers, a narrative that has drawn strong interest from retail investors. Shares also gained momentum after the company filed a prospectus with the SEC, signaling new potential stock offerings tied to warrants expiring in 2028.
- Kenvue (KVUE) rebounded nearly 5% after sliding sharply on Monday following controversial remarks from President Trump. The president linked the company’s Tylenol product to autism without citing scientific evidence, sending the stock down more than 7%. Tuesday’s bounce reflects bargain-hunting as investors weigh political noise against the company’s core fundamentals and consumer health portfolio.
Powell’s Speech and Economic Signals
In his Rhode Island remarks, Powell acknowledged an “unusual and challenging development” in the labor market that has heightened employment risks, even as inflation remains above target. He noted resilience in the economy despite shifting trade, immigration, and fiscal policies, but cautioned that long-term implications are still uncertain. His comments reinforced Wall Street’s focus on the upcoming Personal Consumption Expenditures (PCE) report, due Friday, which could determine whether further rate cuts remain on track this year.
Meanwhile, fresh PMI data pointed to slowing growth. The S&P Global US Flash Manufacturing PMI fell to 52, below expectations and down from last month, while the Services PMI also missed forecasts. Together, the readings suggested softer business activity and cooling labor demand. At the same time, input price pressures remain elevated, raising concerns about inflationary stickiness even as demand moderates.
Tech Pullback and Sector Moves
After powering markets higher on Monday, the “Magnificent Seven” tech giants came under pressure. Nvidia and Amazon led the declines with losses of around 2%, while Alphabet, Microsoft, Apple, and Tesla slipped fractionally. Meta was the lone standout, posting a modest gain. The pullback reflected profit-taking after a record run, with analysts noting that elevated valuations leave megacaps vulnerable to rate and policy headlines.
Gold continued its march higher, setting another record above $3,750 an ounce as investors sought safe havens and positioned for further Fed easing. The steady rise highlights how expectations for additional cuts are feeding both equity and commodity rallies, though it also signals some hedging against persistent economic uncertainty.
Looking Ahead
Markets will remain focused on the Fed’s inflation gauge later this week. A cooler PCE reading could reinforce bets on at least two more cuts this year, while a hotter print may challenge the bullish narrative underpinning recent record highs. In the meantime, earnings from Micron after the bell will offer a closer look at AI-related demand in the semiconductor space, adding another test for tech’s dominant role in the 2025 rally.