Stock market today: Stocks mixed as Fed decision looms

Stocks pulled in both directions on Tuesday, as investors watched for the results from crucial Federal Reserve policy meeting.

The S&P 500 (^GSPC) slid roughly 0.3%, while the Dow Jones Industrial Average (^DJI) rose 0.2% or less than 100 points, coming off a winning day for the major gauges. The tech-heavy Nasdaq Composite (^IXIC) dropped about 0.8% as Nvidia (NVDA) shares retreated in the wake of AI updates from its annual developer conference.

Attention is firmly on the Fed’s two-day meeting beginning Tuesday morning, seen as a test for stocks bruised by recent inflation surprises that undermined bets on interest-rate cuts coming soon.

With policymakers widely expected to keep rates at their historic highs, the focus is on the “dot plot” for any clues to the number and timing of any cuts this year. The central bank’s policy decision is due Wednesday at 2 p.m. ET.

Meanwhile, the Bank of Japan ended its era of negative rates with its first hike in 17 years, making a splash in a week packed with central bank decisions.

In cryptocurrencies, bitcoin (BTC-USD) continued to pull back from its recent record high, falling over 5% to hover below $63,000, on track for its biggest one-day loss in two weeks. Shares of crypto-linked companies Coinbase (COIN) and Marathon Digital (MARA) lost ground alongside the token.

On the corporate front, shares of Unilever (UL) popped after the Ben & Jerry’s maker said it would cut jobs and spin off its ice cream unit.

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  • Japan ends era of negative rates

    The world’s last remaining negative interest wait is no more, after the Bank of Japan, the final major holdout, put an end to an aggressive monetary stimulus program designed to pull the economy out of a slump.

    Japan’s central bank on Tuesday ended its negative policy rate of minus 0.1% and replaced it with a target range of 0.0-0.1%. The hike, the first in 17 years, marks an end of en era in which major central banks engaged in an unconventional experiment in the aftermath of the global financial crisis to fuel growth.

    The long-held interest rate policy, along with other measures to inject money into the economy, “have fulfilled their roles,” said Bank of Japan Gov. Kazuo Ueda.

    In contrast to the US Federal Reserve, which is expected to begin lowering rates this summer after years of fighting off historic levels of inflation, Japan’s central bank has been wrestling with a different problem: the need for growth. Japan suppressed borrowing costs to encourage consumers and business to spend, giving the economy a much needed boost. Inflation has exceeded the Bank of Japan’s 2% target for more than a year.

    Media reports earlier this week indicated the move was coming, muting the impact on the market Tuesday. Market. Tokyo’s benchmark Nikkei 225 index gained close to 0.7% on Tuesday, while the dollar held at about 150 yen.

  • How the realtor settlement could hurt homebuyers

    The major realtor lawsuit settlement that may free home sellers from heavy commissions could have a negative impact on a group already beleaguered with higher interest rates and elevated home pricers.

    Homebuyers, squeezed by lack of inventory, could soon be on the hook for paying agent commissions, reports Yahoo Finance’s Rebecca Chen.

    Under the longstanding system, homeowners looking to list their property are typically liable for both seller and buyer commissions. They sign a contract specifying the percentage of the commission split — traditionally each party takes 3%. But if the settlement is approved by a federal judge, the long-standing standard 6% commission would be eliminated and buyers would be responsible for their own agent compensation.

    Under the new model buyers would have to come up with the money to pay their agent, on top of shelling out a down payment, financing and closing costs.

    Experts also doubt that the settlement will push home prices downward, since economic factors like supply and demand are what’s keeping homes expensive. And as Yahoo Finance’s Myles Udland writes, the Fed’s crude interest rate policy lever isn’t designed to cope with housing affordability either.

  • Stocks trending in morning trading

    Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Tuesday:

    Unilever (UL): The consumer goods giant rose 2% to start the trading day after it announced plans to spin off its ice-cream business — which includes Ben & Jerry’s, Magnum, and Klondike — and a restructuring plan that could impact 7,500 jobs as part of an effort to save more than $800 million over the next three years.

    Bitcoin (BTC-USD): The dominant cryptocurrency is on track to suffer its biggest daily drop in two weeks, as investors continue to flee from the token after it recently hit an-all time high. Bitcoin was changing hands at $63,000, a fall of about 7%.

    Nvidia (NVDA): Fresh off its annual developers conference, the AI darling lost 3% after it unveiled its latest AI chip, which it said is up to 30 times speedier than its predecessor.

    Super Micro Computer (SMCI): Shares of the server manufacturer sank 11% after it said it plans to sell 2 million shares. The company plans to use the roughly $2 billion in proceeds to support operations and boost manufacturing capacity. The stock offering comes as Super Micro’s shares have skyrocketed this year, more than tripling on the demand for AI technology.

  • Stocks slide before Fed meeting

    Wall Street pulled back some as Federal Reserve officials began their two-day huddle to decide their next move on interest rate policy.

    The S&P 500 (^GSPC) slid roughly 0.2%, while the Dow Jones Industrial Average (^DJI) rose above the flatline, coming off a win on Monday for the major indexes. The tech-heavy Nasdaq Composite (^IXIC) dropped about 0.5% as AI darling Nvidia (NVDA) retreated after sharing AI updates from its annual developer conference.

  • The bottom line on Nvidia

    Nvidia’s (NVDA) stock didn’t do too much on day one of its GTC conference despite an impressive array of new product introductions.

    But that doesn’t mean what the company unveiled was disappointing — quite the contrary! I actually think everything CEO Jensen Huang showed off is so complex, it could take a few days for investors to digest and assess if the stock warrants another push higher.

    Wall Street was pleased with what they heard.

    Here’s what JPMorgan analyst Harlan Sur had to say:

    “Overall, the team is further distancing itself with its aggressive cadence of new product launches and more product segmentation over time. With leading silicon (GPU/DPU/CPU), hardware/software platforms, and a strong ecosystem, Nvidia is well positioned to continue to benefit from major secular trends in AI, high-performance computing, gaming, and autonomous vehicles, in our view. Bottom line: NVIDIA continues to be 1-2 steps ahead of its competitors.”

  • The AI stock bubble…or not

    As Nvidia’s (NVDA) GTC conference continues out on the West Coast, it feels natural for BofA’s new fund manager survey out today to weigh into the AI stock bubble debate.

    The end result: institutional investors have no clue if this is a bubble!

    AI stock bubble

    Investors can’t decide whether AI stocks are in a bubble.