US stocks pulled back on Tuesday, erasing gains from the previous two sessions as concerns surrounding economic slowdown weighed heavily on investors. The Nasdaq Composite (IXIC) led the decline, sinking 1.8% as Nvidia (NVDA) shares slipped ahead of its highly anticipated GTC conference. The Dow Jones Industrial Average (DJI) and S&P 500 (GSPC) also struggled, losing 0.8% and 1.2%, respectively.
With market sentiment sensitive, investors are looking ahead to the Federal Reserve’s policy meeting for guidance on economic risks and potential monetary policy shifts. The S&P 500 remains in correction territory, with many on Wall Street uncertain whether recent rebounds signal a sustainable turnaround or just a brief respite in a broader sell-off.
Market Movers:
- Nvidia (NVDA) -2%: Shares dipped ahead of its annual GTC conference, where CEO Jensen Huang is expected to unveil the company's Blackwell Ultra AI chip and its next-generation GPU platform. Investors are closely watching the event, as Nvidia’s performance often serves as a market barometer, particularly in the tech sector.
- Tesla (TSLA) -6%: Shares continued to slide after Chinese competitor BYD announced a new charging system that dramatically reduces recharging time, posing a competitive threat. Additionally, RBC analyst Tom Narayan slashed Tesla’s price target from $440 to $320, citing weaker expectations for its self-driving technology and robotaxi business.
- Sarepta Therapeutics (SRPT) -22%: The stock plummeted after the company reported a patient death associated with its gene therapy treatment for Duchenne muscular dystrophy. The news raised concerns about the safety of the treatment, which had previously received expedited FDA approval, prompting a steep investor sell-off.
The Fed’s Policy Meeting Looms
Investors are awaiting the Federal Reserve’s policy decision, which is expected to keep interest rates steady amid economic uncertainty. Alongside the decision, the release of the Fed’s Summary of Economic Projections and Fed Chair Jerome Powell’s remarks will be closely analyzed. Powell faces the challenge of reassuring markets that economic growth remains stable while addressing rising stagflation fears.
Investor expectations are mixed, with many concerned that recent trade policy shifts and economic data could signal a slowdown. A Bank of America survey indicated that 71% of investors expect stagflation, the highest level since late 2023. Powell’s messaging will be crucial in setting market direction for the rest of the quarter.
Gold Surges, Oil Slides
Amid market uncertainty, gold prices surged to a record high above $3,030 an ounce as geopolitical tensions in the Middle East drove a flight to safe-haven assets. Gold has gained 5% over the past month, reflecting growing investor caution.
Meanwhile, crude oil prices slipped, with WTI crude (CL=F) trading around $67.25 per barrel. Reports of potential OPEC+ production increases and ongoing discussions between the US and Russia regarding the Ukraine conflict have added to oil market volatility.
Looking Ahead
As investors digest Tuesday’s market moves, all eyes are on the Federal Reserve’s policy announcement. If Powell strikes a dovish tone, markets could find some relief, but any hint of prolonged economic challenges may exacerbate ongoing volatility. Tech stocks, particularly Nvidia, will remain in focus as its GTC conference unfolds. Additionally, developments in global trade and energy markets could continue to influence investor sentiment in the coming days.
