Stocks Drop on the Eve of the FOMC – US Market Wrap

Heavy selling resumed in Wall Street’s largest technology companies, prompting a two-day rebound in American stocks as investors pared their exposure to US risk assets. European stocks rose.

One day before a Federal Reserve decision that will be analysed to determine how President Donald Trump’s trade policies are affecting the economy, US equities fell, with megacaps reaching their lowest level since September. Nvidia fell 3.4% despite announcing plans to expand its AI dominance with robots and desktop systems. Data showing high import prices did not help market sentiment, either. Treasuries rose following a strong $13 billion sale of 20-year bonds. Gold surged to a new high.

According to Bank of America’s most recent survey, investors have reduced their holdings of US equities to their lowest level on record, while cash levels have increased. Just about a month ago, stocks were hitting new highs on expectations that Trump’s policies would boost growth. These assumptions may now be jeopardised if the economy slows and large investments in artificial intelligence fail.

The S&P 500 index fell 1.1%. The Nasdaq 100 declined 1.7%. The Dow Jones Industrial Average declined 0.6%.
The yield on 10-year Treasuries fell one basis point to 4.29%. The dollar fluctuated.