Wall Street Stocks Slip as Market Rally Takes a Breather

Published: September 24, 2025, 20:00 EDT

U.S. stocks edged lower on Tuesday, ending a streak of record highs as investors weighed comments from Federal Reserve Chair Jerome Powell on valuations and inflation. Tech shares, particularly Nvidia, led the decline, while gold prices reached another milestone amid expectations of further interest rate cuts.

Market Pullback After Record Highs

Wall Street paused on Tuesday following three straight sessions of record-breaking gains. The S&P 500 slipped 0.6%, the Dow Jones Industrial Average fell 88 points, or 0.2%, and the Nasdaq composite declined 0.9%.

The pullback follows a strong rally since April, when stocks rebounded sharply from earlier losses. While optimism over artificial intelligence, corporate earnings, and interest rate expectations has fueled the surge, some analysts caution the market may have climbed too quickly. Even Federal Reserve Chair Jerome Powell noted that stock valuations appear “fairly highly valued.”

Technology Giants Lead the Decline

Technology stocks, which have been at the heart of Wall Street’s rally, were among the biggest drags. Nvidia, often viewed as a bellwether for AI-related investments, fell 2.8% after paring gains from the previous day. The company had announced a high-profile partnership with OpenAI to expand data center infrastructure, sparking heavy buying before the pullback.

Amazon dropped 3%, and Microsoft lost 1%, adding pressure to the Nasdaq. These declines reflect broader profit-taking among large-cap technology companies that have powered much of the market’s upward momentum this year.

Boeing Provides Support Amid Weakness

Not all corporate stories weighed negatively on the market. Boeing rose 2% after announcing that Uzbekistan Airways agreed to purchase 14 Dreamliner aircraft, with an option for eight more. The order bolstered confidence in Boeing’s recovery efforts as it works to rebuild after years of setbacks and safety concerns.

Meanwhile, healthcare firm Kenvue gained 1.6% after rebounding from losses the day before. The drop had followed speculation that former President Donald Trump might link its Tylenol product to autism risk during public remarks. While Trump cautioned pregnant women about taking the medication, he did not reference significant new research, and the company has strongly disputed any connection between Tylenol and autism.

Market Numbers at a Glance

By the close of trading, the S&P 500 dropped 36.83 points to finish at 6,656.92. The Dow Jones Industrial Average slipped 88.76 points to 46,292.78, and the Nasdaq composite shed 215.50 points to 22,573.47.

The pullback comes after weeks of near-uninterrupted gains, suggesting that investors may be recalibrating expectations ahead of key economic data releases later in the week.

Gold Extends Record-Breaking Rally

Gold prices continued their extraordinary climb, briefly surpassing $3,800 per ounce—a new record high. The precious metal has risen nearly 45% this year, outpacing even the surging stock market.

Several factors have contributed to the rally: expectations of interest rate cuts from the Federal Reserve, concerns about persistent inflation, and broader anxiety about rising government debt levels. Investors often view gold as a safe-haven asset during periods of economic and financial uncertainty.

Fed Balances Inflation and Jobs

Powell acknowledged on Tuesday that the central bank is in a difficult position, with inflation still above the Fed’s 2% target even as signs of labor market weakness emerge. These were his first public remarks since the Fed cut its benchmark interest rate last week—the first reduction of the year.

While officials have indicated more rate cuts may follow later in 2025 and into 2026, they remain cautious. Lower rates can stimulate growth but also risk fueling inflation further, a balance the Fed is closely monitoring.

Economists are watching Friday’s release of the Fed’s preferred inflation gauge. Forecasts suggest household prices rose slightly faster last month, underscoring ongoing challenges in achieving price stability.

Mixed Signals on Business Activity

Economic data released Tuesday showed that U.S. businesses remain in expansion mode, though at a slower pace. According to S&P Global, tariffs have increased input costs for many companies. However, weaker consumer demand and heightened competition have made it difficult for firms to fully pass those costs on to customers.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said the findings indicate inflationary pressures may ease somewhat for households, but not enough to bring inflation down to the Fed’s 2% goal in the near term.

Treasury Yields Edge Lower

In the bond market, Treasury yields slipped as investors sought safe assets. The yield on the 10-year Treasury note declined to 4.11% from 4.15% the previous session. Lower yields suggest some investor caution, reflecting both economic uncertainties and anticipation of Fed policy moves.

Global Markets See Modest Moves

Overseas markets presented a mixed picture. France’s CAC 40 index rose 0.5%, supported by strength in European industrials, while Hong Kong’s Hang Seng fell 0.7% amid concerns over slowing Chinese economic growth. Japan’s markets were closed for a national holiday, contributing to lighter trading volumes across Asia.

The modest international activity underscored the global nature of current market dynamics, where central bank policy shifts, trade measures, and geopolitical tensions influence investor sentiment across continents.

Looking Ahead

With stocks at elevated levels and investors awaiting fresh economic data, analysts expect continued volatility. The Fed’s path on interest rates, inflation readings, and corporate earnings guidance are likely to drive market direction in the weeks ahead.

For now, Wall Street’s retreat appears less a reversal than a pause, as investors weigh whether the rally has run ahead of fundamentals—or if optimism about growth, AI, and lower rates can sustain further gains.