Wall Street edges back from its record heights
[September 17, 2025] By
STAN CHOE
NEW YORK (AP) — U.S. stocks edged back from their record heights on
Tuesday as the countdown ticked toward what Wall Street expects will be
the first cut of the year to interest rates by the Federal Reserve.
The S&P 500 fell 0.1% from its latest all-time high. The Dow Jones
Industrial Average dipped 125 points, or 0.3%, while the Nasdaq
composite slipped 0.1% from its own record set the day before.
Stocks have run to records on expectations that the Fed will announce
the first of a series of cuts to rates on Wednesday in hopes of giving
the economy a boost. The job market has slowed so much that traders
believe Fed officials now see it as the bigger danger for the economy
than the threat of higher inflation because of President Donald Trump’s
tariffs.
The Fed has been holding off on cuts to rates because inflation has
remained above its 2% target, and easier interest rates could give it
more fuel.
A report on Tuesday said shoppers increased their spending at U.S.
retailers by more last month than economists expected. A chunk of that
could be due to shoppers having to pay higher prices for the same amount
of stuff. But it could also indicate solid spending by U.S. households
could continue to keep the economy out of a recession.
The data did little to change traders’ expectations for a cut to
interest rates on Wednesday, followed by more through the end of the
year and into 2026.
Such high expectations have sent stocks to records, but they can also
create disappointment if unfulfilled. That’s why more attention will be
on what Fed Chair Jerome Powell says about the possibility of upcoming
cuts in his press conference following Wednesday’s decision than on the
decision itself.
Fed officials will also release their latest projections for where they
see interest rates and the economy heading in upcoming years, which
could provide another potential flashpoint.
For now, global fund managers are tilting their portfolios toward stocks
at the highest level in seven months, according to the latest survey by
Bank of America. That’s even though a record 58% of them are also saying
that stocks look too expensive at the moment.
On Wall Street, Dave & Buster’s fell 16.7% after the entertainment chain
reported a weaker profit for the latest quarter than analysts expected.
[to top of second column] |
People pass the New York Stock Exchange on Nov. 5, 2024, in New
York. (AP Photo/Peter Morgan, File)
 New York Times Co. fell 1.6% after
Trump filed a $15 billion defamation lawsuit against the newspaper
and four of its journalists on Monday. The lawsuit points to several
articles and a book written by Times journalists and published in
the lead up to the 2024 election as “part of a decades-long pattern
by the New York Times of intentional and malicious defamation
against President Trump.”
On the winning end of Wall Street was Steel
Dynamics, which climbed 6.1% after it said it’s seeing improved
earnings across its three business units. It credited strong demand
for steel from the non-residential construction and auto industries,
among other things.
Chipotle Mexican Grill added 1.9% after its board said the company
could buy back an additional $500 million of its stock. Such a move
can send cash directly to investors and boost per-share results.
Oracle rose 1.5% on speculation that it could be part of a deal that
would keep TikTok operating in the United States.
All told, the S&P 500 fell 8.52 points to 6,606.76. The Dow Jones
Industrial Average dropped 125.55 to 45,757.90, and the Nasdaq
composite sank 14.79 to 22,333.96.
In stock markets abroad, indexes fell in Europe following a mixed
showing in Asia.
Japan’s Nikkei 225 added 0.3% to finish at another record. The rally
comes despite political uncertainty after Japanese Prime Minister
Shigeru Ishiba said he is stepping down. An election within the
ruling Liberal Democratic Party to pick a new leader is expected
Oct. 4.
In the bond market, the yield on the 10-year Treasury eased to 4.03%
from 4.05% late Monday.
___
AP Business Writers Yuri Kageyama and Matt Ott contributed.
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