Stocks Slip from Record Highs as Momentum Fades Ahead of Fed Statement

For the second session in a row, the stock market opened with strong gains, pushing both the S&P 500 and Nasdaq Composite to new intraday record highs. The S&P 500 hit a peak of 6,409.26, while the Nasdaq touched 21,303.96 before midday profit-taking erased the early optimism and dragged the major averages into negative territory by the close.

The retreat followed a broad-based sell-off that began in the late morning, as the absence of fresh catalysts—particularly on the trade or policy front—left markets vulnerable to reversal after a strong start.

Among early movers, NVIDIA (NVDA) climbed to a record high of $179.38 on reports that it had purchased 300,000 H20 chips from Taiwan Semiconductor (TSM) to satisfy AI-related demand in China. Despite the headlines, NVIDIA shares eventually slipped 0.7% on the day, mirroring a broader fade in the information technology sector, which closed down 0.2% after an early gain of 0.7%.

Industrials (-1.1%), health care (-0.8%), consumer discretionary (-0.7%), and financials (-0.6%) all contributed to the downside, as did communication services (-0.4%) and materials (-0.3%).

A series of disappointing earnings reactions also weighed on sentiment. UPS dropped 10.6% after missing guidance, while UnitedHealth (-7.4%), Royal Caribbean (-5.0%), Nucor (-2.6%), and Merck (-1.6%) all fell following quarterly results.

Losses were widespread across market caps, with the Vanguard Mega Cap Growth ETF falling 0.6%, the Russell 2000 slipping 0.7%, and the S&P MidCap 400 off 0.2%.

Still, not every corner of the market was in retreat. Real estate (+1.7%) and utilities (+1.2%) led a defensive charge, benefiting from a sharp drop in Treasury yields. The 10-year yield slid nine basis points to 4.33%, breaching both its 50-day and 200-day moving averages, while the 2-year fell to 3.88%. These moves were driven in part by a pre-FOMC rally in bonds, with markets anticipating a dovish tone from the Fed—even if no rate cut is formally announced.

Energy stocks (+1.0%) also rallied on a 3.7% spike in crude oil prices, which rose $2.47 to settle at $69.22 per barrel. The jump followed President Trump’s comments aboard Air Force One warning of secondary sanctions on Russia if it fails to meet a ceasefire deadline within 10 days.

Looking ahead, the market faces a trio of major events tomorrow: the FOMC policy announcement, advance Q2 GDP data, and another wave of earnings reports, including results from several bellwether companies. With momentum in flux, these catalysts could either reinforce today’s downside pressure—or reenergize the rally toward fresh record territory.

While the broader market struggled to regain its footing today, our FTinvest 11 portfolio bucked the trend with a steady and confident advance. In a display of resilience, the index recovered nearly all of yesterday’s decline, closing the session with a solid gain of 0.52%.

The portfolio index ended the day at 807.92—just a hair’s breadth (0.01 points) shy of its all-time high. Despite market-wide hesitation, FTinvest 11’s performance stood out as a sign of underlying strength and investor confidence.