S&P 500 Slips From Record Highs as Oracle Surges on TikTok Optimism

What to Know

• S&P 500 reversed from fresh record highs as traders booked profits.
• Oracle surged 5% on reports of a TikTok deal consortium.
• Retail sales rose 0.6% in August, showing consumer resilience.
• Markets await clarity from the Fed on rate cuts and inflation risks.

Stocks Open Higher but Reverse Into Red

U.S. equities began Tuesday with strong momentum, pushing the S&P 500 to fresh record highs before profit-taking and caution ahead of the Federal Reserve’s policy meeting weighed on sentiment.

By 14:00 GMT, the Dow Jones Industrial Average was down 165 points, or 0.36%, at 45,718.41. The S&P 500 slipped 0.08% to 6,609.79, while the Nasdaq Composite eased 0.04% to 22,339.35. The pullback came after the S&P 500 briefly touched 6,624.13, extending Monday’s record close above the 6,600 mark.

Why Did Stocks Reverse After Records?

Gains in large-cap tech stocks and optimism around U.S.-China trade discussions initially lifted markets. However, investor caution set in as the Fed began its two-day policy meeting. Traders have already priced in a quarter-point rate cut but remain focused on Fed Chair Jerome Powell’s tone regarding future easing. Profit-taking in tech names added to the reversal, trimming early gains.

Economic Data Signals Resilient Spending

U.S. retail sales provided a positive surprise, rising 0.6% in August, double expectations of 0.3%. July’s reading was also revised higher. Excluding autos, sales climbed 0.7%, supported by strong online shopping, restaurants, and apparel demand. Year-over-year, sales increased 5%, comfortably outpacing consumer inflation at 2.9%.

The data suggests consumers remain resilient despite signs of labor market weakness, easing concerns that slowing job growth could weigh on overall spending.

Oracle Leads Movers on TikTok Optimism

Oracle shares jumped 5% after reports confirmed its role in a consortium seeking to secure TikTok’s continued operations in the U.S. The deal speculation helped Oracle lead the S&P 500’s gainers despite the broader market pullback.

Other notable movers included:

• Chipotle rose 2% after expanding its share buyback program by $500 million.
• Novo Nordisk advanced 3% on promising trial data for its weight-loss drug.
• Denny’s added 1.5% as activist investors disclosed a 9.4% stake.
• ArcBest gained 1% after increasing its buyback authorization.

On the downside:

• Dave & Buster’s tumbled 16% after posting weaker-than-expected earnings.
• Adtran sank over 8% following a convertible notes offering.
• Rocket Lab fell nearly 4% on plans for a $500 million stock sale.
• Oscar Health slipped 4% after announcing a $355 million debt sale.
• Nvidia eased slightly after reports of weak demand for its China-focused RTX6000D chip.

Market Outlook: Fed in Focus

The Federal Reserve’s decision on Wednesday, followed by Powell’s press conference, remains the week’s most important catalyst. While a 25-basis-point rate cut appears certain, the tone on inflation and the pace of future easing will determine if equities can extend their record run.

Stronger-than-expected consumer data bolsters the bullish case for stocks, but a hawkish surprise from Powell could stall momentum and trigger deeper corrections.

Q&A: S&P 500 Outlook Amid Fed Meeting and Tech Moves

Why did the S&P 500 reverse after touching record highs?

The index briefly hit new record levels but retreated as traders took profits in large-cap tech stocks. Investor caution ahead of the Federal Reserve’s policy decision also weighed on sentiment, leading to a reversal from earlier gains.

How did U.S. economic data influence the market?

Retail sales for August rose 0.6%, beating expectations and showing strong consumer demand. This reassured investors that spending remains resilient despite concerns over the labor market. However, the data also raised questions about whether the Fed might lean less dovish in its policy guidance.

Which companies stood out in Tuesday’s session?

Oracle jumped 5% on reports it is part of a consortium to keep TikTok operating in the U.S. Chipotle and Novo Nordisk posted solid gains on buyback and trial news, while Dave & Buster’s and Adtran sank on weaker earnings and financing plans. Nvidia slipped slightly amid reports of weak demand for its China-focused chip.

What role does the Fed meeting play in market direction?

The Federal Reserve’s decision is the primary driver for near-term market sentiment. While a 25 basis point cut is fully priced in, Powell’s tone on inflation and future easing will decide if equities can extend their record run or face further profit-taking.

What levels should traders watch on the S&P 500?

Immediate resistance remains around the recent high of 6,624, while near-term support lies at 6,580. A break above resistance could fuel another leg higher, but a hawkish Fed tone could send the index back toward key support zones.

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