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Financial Markets 10/29 15:31
NEW YORK (AP) -- U.S. stocks bounced around their records on Wednesday after
the Federal Reserve made moves to boost the job market but also warned that
more help isn't guaranteed.
The S&P 500 finished virtually flat and edged down by less than 0.1%. The
Dow Jones Industrial Average dipped 73 points, or 0.2%, and the Nasdaq
composite rose 0.5%. All three indexes were coming off an all-time high.
Stocks had been on track for modest gains in the afternoon after the Fed cut
its main interest rate for the second time this year in hopes of helping the
slowing job market. But the market snapped lower after Chair Jerome Powell
later warned that it "is not a foregone conclusion" that the Fed will cut again
in December at its next meeting, "far from it."
"That needs to be taken off the board," Powell said.
The warning hit Wall Street because traders saw a cut in December as a near
certainty, along with potentially more in 2026, and they had already driven
stock prices to records in part because of it. Powell said officials had
"strongly differing views about how to proceed in December."
Even Wednesday's decision to cut came with less authority than expected. One
member of the Fed's committee, Jeffrey Schmid, voted to keep the federal funds
rate steady now instead of lowering it.
In the meantime, the deluge continued of big U.S. companies reporting how
much profit they made during the summer, and the frenzy in
artificial-intelligence technology is driving growth. The pressure is on
companies to deliver gains because that's one way they can quiet criticism that
their stock prices have shot too high.
Teradyne soared 20.5% for the biggest gain in the S&P 500 after the company,
which makes automated test equipment and advanced robotics systems, reported
stronger profit for the latest quarter than analysts expected. CEO Greg Smith
credited strength related to artificial-intelligence applications and said
"AI-related test demand remains robust."
Nvidia, meanwhile, climbed 3%. The poster child of the AI boom became the
first company valued at $5 trillion on Wall Street, just three months after it
was the first to break through the $4 trillion barrier.
Even Caterpillar, the company known for its construction and mining
equipment, is feeling a boost because of AI. It rallied 11.6% after reporting
stronger profit and revenue for the latest quarter than analysts expected. The
strongest growth came from Caterpillar's business that provides equipment for
big data centers that are powering AI.
On the losing end of Wall Street was Fiserv, which plunged 44% for its worst
day since its stock began trading in 1986. The payments and financial
technology company reported weaker profit for the latest quarter than analysts
expected, slashed its profit forecast for the year and revamped its board of
directors and leadership team.
Mondelez International fell 3.9%, even though it reported stronger results
than analysts expected. The company, whose brands include Oreo cookies and
Toblerone chocolate, has been dealing with sharp increases for the cost of
cocoa. It expects challenging conditions to continue in some markets, though it
hopes that price increases are moderating for cocoa.
All told, the S&P 500 edged down by 0.30 to 6,890.59 points. The Dow Jones
Industrial Average fell 74.37 to 47,632.00, and the Nasdaq composite rose
130.98 to 23,958.47.
In stock markets abroad, indexes were mixed in Europe following a stronger
finish in Asia.
Tokyo's Nikkei 225 jumped 2.2% to another record, while Seoul's Kospi rose
1.8% to its own all-time high after President Donald Trump met with South
Korea's leader following his visit in Japan.
Stocks rose 0.7% in Shanghai ahead of a meeting between Trump and China's
leader, Xi Jinping. The world's two largest economies have been locked in an
escalating trade war, with Washington imposing high tariffs and tightened
technology controls and China retaliating with curbs on rare earth shipments,
one of its key sources of leverage.
In the bond market, the yield on the 10-year Treasury rose to 4.07% from
3.99% late Tuesday as traders pared their bets for a coming cut to rates in
December.
The Fed has been warning that it may have to halt cuts if inflation
accelerates beyond its still-high level, because lower rates can worsen
inflation.
Making an already tough course for Fed officials more difficult is the U.S.
government's shutdown. That has delayed important updates on the economy that
would normally help guide the Fed's decision-making process.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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