Stock market today: Nvidia's decline weighs on Wall Street and indices fall from records

NEW YORK (AP) U.S. stock indexes fell slightly from their record highs on Thursday, weighed down by a decline for Wall Street's darling Nvidianext to a mixed set of reports on the economy.

The S&P 500 fell 0.3% from its all-time high before the holiday trading break on Wednesday, June 19. The Nasdaq Composite Index also pulled back from its record high and slipped 0.8%. The Dow Jones Industrial Average beat the market with a gain of 299 points, or 0.8%.

Nvidia gave up an early gain and suffered a 3.5% loss, putting an eight-week winning streak in jeopardy. The microchip company has been the biggest beneficiary of Wall Street's frenzy around artificial intelligence technology, and it has supplanted Microsoft Tuesday to become the most valuable company on the market. Nvidias has ceded first place to Microsoft.

Nvidias chips help fuel the shift to AIwhose proponents see explosive growth in productivity and profits, and it has already increased 164% this year after more than tripling last year.

In addition to raising concerns about a potential bubble where investor enthusiasm becomes excessive, stunning gains from Nvidia and other AI winners have also helped support the stock market despite some weakness in the economy American. High interest rates intended to curb inflation have hurt the housing market and manufacturing, while low-income households are showing signs of difficulty keeping pace with ever-increasing prices.

Winnebago Industries, for example, introduced economy trailers to attract customers amid an inconsistent retail environment. But it said Thursday that its profits and revenue for the latest quarter fell short of analysts' expectations. Shares of the RV and pontoon maker fell 3.5%.

To show how powerful AI can be, Accenture rose 7.3%, even though the consulting and professional services company reported weaker-than-expected profits and revenue for the latest quarter. In its earnings report, the company highlighted how it won more than $900 million in new orders for generative AI, bringing the last three quarters' total to $2 billion.

Overall, the S&P 500 fell 13.86 points to 5,473.17. The Dow rose 299.90 to 39,134.76 and the Nasdaq fell 140.64 to 17,721.59.

The AI ​​stock supernova helped mask some weakness beneath the market surface. This can be a worrying signal for market observers, who would rather see a large number of companies pushing the market higher than just a handful.

It has been common in past cycles, as the stock market hits a significant high, that the fastest-growing names are the ones carrying the load, according to Scott Wren, senior global market strategist at the Wells Fargo Investment Institute,

In the bond market, Treasury yields rose following a series of mixed reports on the economy. The number of American workers filing for unemployment benefits fell last week, but not as much as economists had hoped. A separate report says manufacturing in the Mid-Atlantic region is growing, but not as fast as economists thought. Homebuilders, meanwhile, began constructing fewer new homes last month than expected.

The hope on Wall Street actually lies in a slowdown in growth in the US economy. This could help contain inflationary pressures and convince The Federal Reserve will reduce its main interest rate later this year. Such a reduction would ease pressure on the economy and drive up investment prices.

Fed officials have indicated they may cut their main interest rate once or twice this year, down from its highest level in more than 20 years. Many traders on Wall Street, meanwhile, expect two or more cuts, according to CME Group data.

The 10-year Treasury yield rose to 4.25% from 4.22% Tuesday evening. The two-year yield, which more closely tracks the Fed's expectations, rose to 4.73% from 4.71%.

Some other central banks have already started to lift the brakes on their economies.

THE Swiss National Bank reduced its main rate on Thursday. THE bank of englandhowever, kept its main rate stable.

Stock market indices rose in much of Europe following these movements. The French CAC 40 gains 1.3% to recover more of its losses last week following the shocking election results. Asian indices were mixed.