US stocks slip as Wall Street's relentless rally takes a pause

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NEW YORK (AP) — U.S. stock indexes slipped on Tuesday as Wall Street took a pause from its relentless rally.

The S&P 500 dipped 0.6%. The Dow Jones Industrial Average dropped 88 points, or 0.2%, and the Nasdaq composite sank 0.9%.

It’s the first pullback for the indexes after the trio set all-time highs in each of the last three days. Since surging from a bottom in April, the broad U.S. stock market has been facing criticism that it’s shot too high, too fast and become too expensive. Even the head of the Federal Reserve, Jerome Powell, said on Tuesday that stock prices broadly look “fairly highly valued.”

Nvidia weighed on the market after giving back some of its big gain from the day before, when it announced a partnership with OpenAI to build out data centers. Wall Street’s most influential stock lost 2.8%.

Other Big Tech stocks that have been some of the biggest reasons for Wall Street’s run to records gave back some of their big gains. Amazon fell 3%, and Microsoft slipped 1%.

But a 2% rise for Boeing helped limit the market’s losses after Uzbekistan Airways agreed to buy 14 of its Dreamliner airplanes and said it may add eight more to the order.

Kenvue climbed 1.6% and recovered some of its drop from Monday, when it had sunk on worries that President Donald Trump would say its Tylenol product may increase the risk of autism in children. Trump did warn pregnant women about taking Tylenol, but he did not seem to cite any significant new research to back it up. Kenvue has disputed any link between the drug and autism.

All told, the S&P 500 fell 36.83 points to 6,656.92. The Dow Jones Industrial Average dropped 88.76 to 46,292.78, and the Nasdaq composite sank 215.50 to 22,573.47.

Gold, meanwhile, continued its record-breaking rally and briefly topped $3,800 per ounce. It’s soared nearly 45% so far this year, even more than the U.S. stock market, in part on expectations that the Fed will cut interest rates to help the slowing U.S. job market.

Worries about potentially high inflation because of White House influence on the Fed, along with mountains of debt for the U.S. and other governments, have also sent gold’s price higher.

Powell said again on Tuesday that the Fed is stuck in an unusual position because worries about the job market are rising at the same time that inflation has stubbornly remained above its 2% target. They were his first public remarks since the Fed cut its main interest rate last week for the first time this year.

Fed officials have penciled in more cuts to rates through the end of this year and into next, but they are remaining wary because lower rates can also give inflation more fuel.

An update on Friday will show how much prices are rising for U.S. households based on the Fed’s preferred measure of inflation, and economists expect it to show a slight acceleration for last month.

A preliminary report suggested activity at U.S. businesses is still growing, but at a slower pace as tariffs raise prices for them. Companies may be finding it difficult to pass those higher costs fully on to customers because of “weaker demand and stiff competition,” according to S&P Global.

The numbers suggest that inflation could moderate for U.S. households, but not by so much that it drops below the Fed’s 2% target in the coming months, according to Chris Williamson, chief business economist at S&P Global Market Intelligence.

In the bond market, Treasury yields ticked lower. The yield on the 10-year Treasury eased to 4.11% from 4.15% late Monday.

In stock markets abroad, indexes were mixed amid modest moves across much of Europe and Asia.

France’s CAC 40 rose 0.5%, and Hong Kong’s Hang Seng fell 0.7% for two of the bigger moves. Japan’s stock market was closed for a national holiday.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.