Stocks on Wall Street tick lower and momentum stalls after a rare August gain

Storm clouds form above the New York Stock Exchange building in New York City.
Stocks have struggled this month as yields have shot upward in the bond market, which cranks up the pressure on other investments.
(J. David Ake / Associated Press)

Wall Street ticked lower Tuesday ahead of two potentially market-shaking events later in the week.

The Standard & Poor’s 500 slipped 12.22 points, or 0.3%, to 4,387.55, giving back some of its rare August gain from a day before, which was powered by large tech stocks. The Dow Jones industrial average fell 174.86 points, or 0.5%, to 34,288.83, and the Nasdaq composite edged up 8.28 points, or 0.1%, to 13,505.87.

Stocks have struggled this month as yields have shot upward in the bond market, which cranks up the pressure on other investments. The yield on the 10-year Treasury edged a bit higher Tuesday, a day after reaching its highest level since 2007.


Nvidia, one of Wall Street’s most influential stocks, swung from an early gain to a loss of 2.8% ahead of its earnings report on Wednesday, one that could be pivotal for the stock market.

The chipmaker has been at the center of Wall Street’s frenzy around artificial intelligence technology, which investors believe will create immense profits for companies. Nvidia’s stock has already more than tripled this year, and it probably faces a high bar to justify the huge move.

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Analysts expect Nvidia to say on Wednesday that its revenue swelled by nearly $4.5 billion during the spring to $11.19 billion from a year earlier.

Dick’s Sporting Goods plunged 24.1% after its profit for the latest quarter fell well short of expectations. It also cut its forecast for earnings over the full year, citing “inventory shrink.” That’s a term the industry uses to refer to theft and other losses of goods that never become sales.

Macy’s fell 14.1% despite reporting stronger results for the latest quarter than Wall Street expected. It also stood by its financial forecasts for the full year, though it said economic conditions look uncertain.

On the winning side of Wall Street, Lowe’s gained 3.7% after reporting stronger profit for the latest quarter than analysts expected. The home improvement retailer also stood by its forecast for results over the full year and said it gave more than $100 million in bonuses to its front-line workers.


Microsoft edged up 0.2% as U.K. regulators consider a revamped bid by the company to buy video game maker Activision Blizzard, which would be one of the largest deals in tech history.

In the bond market, the 10-year Treasury yield ticked down to 4.32% from 4.34% late Monday. It’s the center of the bond market and helps set rates for mortgages and other important loans.

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The two-year Treasury yield, which moves more on expectations for the Federal Reserve, rose to 5.04% from 5.00%.

More fireworks could come later this week, when Fed Chair Jerome H. Powell is scheduled to give a highly anticipated speech. He’ll be speaking Friday at a Fed event in Jackson Hole, Wyo., the site of several major policy announcements by the Fed in the past.

Based on the market volatility, traders are bracing for the Jackson Hole speech to be a bigger potential deal than Nvidia’s earnings report, according to Barclays strategists led by Stefano Pascale and Anshul Gupta.

In recent years, a wide variety of investments including commodities, bonds and foreign stocks has become more vulnerable to outsize moves around Jackson Hole, the strategists say.

The Fed has already hiked its main interest rate to the highest level since 2001 in hopes of grinding high inflation down to its target of 2%. High rates work bluntly by slowing the entire economy and hurting prices for investments.


Inflation has come down considerably from its peak above 9% last summer, but economists say getting the last percentage point of improvement may be the most difficult.

The hope among traders is that Powell on Friday may indicate the Fed is done with hiking interest rates for this cycle and that it could begin cutting them next year. But strong reports on the economy recently are hurting such hopes. A solid job market and spending by U.S. households could be feeding more fuel into pressures pushing upward on inflation.

Mortgage interest rates surpassed 7% this week, dealing another blow to potential homeowners who now face the highest borrowing costs since 2002.

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In stock markets abroad, indexes were mostly higher. Stocks rose in China to recover some of their sharp losses driven by worries about the Asian nation’s faltering economic recovery.

The Hang Seng in Hong Kong climbed 1%, though it remains down 11.4% for August so far. Stocks in Shanghai added 0.9%, trimming their loss for the month to 5.2%.

AP writers Matt Ott and Joe McDonald contributed to this report.