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US Indexes Hanging Close to Records    06/25 09:27

   A rebound for Nvidia is helping keep U.S. indexes close to their records 
Tuesday.

   NEW YORK (AP) -- A rebound for Nvidia is helping keep U.S. indexes close to 
their records Tuesday.

   The S&P 500 was 0.2% higher in morning trading and edging closer to its 
all-time high set a week earlier. The rebound for Nvidia helped the Nasdaq 
composite climb 0.7% and head toward its first gain in four days. The Dow Jones 
Industrial Average, which doesn't include Nvidia among its members, was a 
laggard and down 140 points, or 0.4%, as of 10:05 a.m. Eastern time.

   Nvidia was up 3.4% and on track to break a three-day losing streak where it 
lost nearly 13%, its worst such stretch since 2022. It's just one stock, but 
Nvidia has the power to swing the S&P 500 around because it's grown to become 
one of Wall Street's largest and most influential stocks.

   Voracious demand for Nvidia's chips to power artificial-intelligence 
applications have been a big reason for the U.S. stock market's run to records 
recently, even as the economy's growth slows under the weight of high interest 
rates. But the AI boom has been so frenzied that it's raised worries about a 
possible bubble in the stock market and too-high expectations among investors.

   The recent struggles for Nvidia haven't raised too many concerns, at least 
not yet, because market watchers have been hoping for more stocks to 
participate in the rising stock market rather than just a handful of AI winners.

   That's what happened on Monday, when banks, oil companies and other stocks 
outside of the AI boom rallied as Nvidia sank again. But it may be a challenge 
for such stocks to keep picking up any slack from AI darlings given the 
slowdown in the U.S. economy's growth.

   In financial markets, the focus among investors is starting to swing toward 
growth and away from just inflation and interest rates, according to Michael 
Wilson and other strategists at Morgan Stanley.

   Pool Corp., a distributor of swimming pool supplies, tumbled 8% after it 
said construction of new pools is falling amid "cautious consumer spending on 
big ticket items" and cut its financial forecasts for the year.

   It was the worst performer in the S&P 500, but Pool wasn't alone. Three out 
of every four stocks in the index were falling.

   SolarEdge Technologies dropped 16.4% after it said a customer that owes it 
$11.4 million filed for Chapter 7 bankruptcy, which raises questions about how 
much the solar-power company can collect and when.

   Broadly, sales at retailers across the country have been up and down 
recently, as companies highlight how lower-income customers are often 
struggling to keep up with still-rising prices. The job market, though, 
continues to look mostly solid. A report on Tuesday also showed confidence 
among U.S. consumers fell this month, but not by quite as much as economists 
expected.

   Upper-income households seem to be doing better, and they're booking trips 
on cruise ships. Carnival steamed 3.7% higher after it raised its profit 
forecast for 2024, saying bookings for the rest of the year are the best on 
record in terms of both price and occupancy. And, while early, booking trends 
for next year look even better.

   In the bond market, Treasury yields were holding relatively steady. The 
yield on the 10-year Treasury edged up to 4.25% from 4.23% late Monday.

   It's been mostly falling since topping 4.70% in late April, which has 
relaxed the pressure on the stock market. Yields have sunk on hopes that 
inflation is slowing enough to convince the Federal Reserve to cut its main 
interest rate later this year.

   The Fed has been keeping the federal funds rate at the highest level in more 
than 20 years, hoping to grind down on the economy just enough to get inflation 
under control. The hope on Wall Street is that the Fed will cut interest rates 
at the exact right time. If it waits too long, the economy's slowdown could 
careen into a recession. If it's too early, inflation could reaccelerate.

   Investors have been itching for the first cut to interest rates, with many 
traders banking on it arriving in September. But stocks don't always rise 
afterward. Historically, the S&P 500 has dropped an average of 20% in the 250 
days following the first rate cut, according to Wells Fargo Investment 
Institute.

   That's because it matters why the Fed is cutting rates. If it's making 
conditions easier for the economy simply because inflation is finally 
comfortably low enough to cut rates, that could be good for stocks. But if it 
cuts because the economy is suddenly spinning toward a recession, that's 
different.

   In stock markets abroad, indexes fell across much of Europe and rose in much 
of Asia.

 
 
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