U.S. stock indexes ended lower Wednesday, marking a second consecutive decline after last week’s record highs. The Dow Jones Industrial Average fell 0.4%, while the S&P 500 and Nasdaq each slipped 0.3%.
Markets were unsettled following Federal Reserve Chair Jerome Powell’s remarks on Tuesday that equities were “fairly highly valued.” The comments, his first since the Fed’s interest rate cut last week, revived concerns about stretched valuations, particularly in the technology sector.
The S&P 500 Materials sector led the day’s losses, dropping 1.6%, while technology shares fell 0.5%. Major tech names were mixed: Oracle declined 1.7%, Nvidia shed 0.8%, Amazon slipped 0.2%, and Micron dropped 2.8% despite strong quarterly sales. Conversely, Alibaba surged 8% after boosting its AI budget, Marvell Technology rose more than 7%, and Intel gained over 6% on reports Apple may take a stake.
Energy stocks were the standout performers. The S&P 500 Energy sector advanced 1.3%, lifted by rising oil prices as West Texas Intermediate crude climbed 2.2% to $64.80 a barrel. Xcel Energy jumped more than 6%, EQT gained 4%, and Phillips 66 rose 3%. Lithium Americas nearly doubled after reports the Trump administration is considering taking a stake in the miner’s Nevada project with General Motors, sending GM shares up 2.3%.
Commodity and currency markets were volatile. Gold futures, which hit a fresh record early Wednesday, pulled back 1.5% to $3,765 an ounce. The 10-year Treasury yield ticked up to 4.15%, while Bitcoin advanced 1.6% to about $113,500. The U.S. dollar index strengthened 0.6% to 97.87.
Among individual movers, Freeport-McMoRan plunged 17% after cutting sales forecasts and declaring force majeure at its Grasberg mine in Indonesia. Axon Enterprise slid 10% after announcing an AI-driven acquisition. On the upside, Xcel Energy rose sharply after settling litigation related to the 2021 Colorado wildfires, Centene climbed nearly 6% on strong value-based care results, and Intel extended a month-long rally fueled by major investments.
Powell’s valuation warning also stirred comparisons to the late 1990s Dotcom Bubble. Some analysts noted echoes of former Fed Chair Alan Greenspan’s “irrational exuberance” caution in 1996, which foreshadowed the tech boom and bust that followed.
