Stock market today: Wall Street pulls back from its rally a day before

It sank 4.7 per cent despite reporting stronger profit than expected and giving a forecast for upcoming results that was close to Wall Streets.Stocks of several chipmakers were heavy weights on the market, including a 2.4 per cent drop for Nvidia and a 2.3 per cent fall for Advanced Micro Devices.

Stocks are pulling back on Wednesday from Wall Street's rally a day before.

The S&P 500 was 0.3 per cent lower in early trading. The Dow Jones Industrial Average was down 111 points, or 0.3 per cent, at 33,815, as of 9:45 am Eastern time, while the Nasdaq composite was 0.3 per cent lower.

General Mills fell to one of the market's largest drops after the maker of Cheerios and Haagen-Dazs reported weaker revenue for the latest quarter than analysts expected. It sank 4.7 per cent despite reporting stronger profit than expected and giving a forecast for upcoming results that was close to Wall Street's.

Stocks of several chipmakers were heavy weights on the market, including a 2.4 per cent drop for Nvidia and a 2.3 per cent fall for Advanced Micro Devices. They have been at the center of a frenzy around artificial-intelligence technology, with hopes that it could lead to monumental profits.

But a report from the Wall Street Journal said the US government is considering restrictions on exports of AI chips to China. Technology has been one of the flashpoints in tensions between the world's two largest economies, which remain high. Even with Wednesday's drop, though, Nvidia's stock is still up nearly 180 per cent for the year so far.

On the winning side of Wall Street was AeroVironment, which rose 6 per cent. The maker of unmanned aircraft, tactical missile systems and other equipment used by the US military and in Ukraine reported stronger profit and revenue for the latest quarter than expected. It also gave a stronger forecast for upcoming results than analysts expected amid what it called a record backlog.

Elsewhere in markets, trading was relatively quiet. Treasury yields moved only modestly and stock indexes abroad were mixed.

The big question for markets worldwide is whether economies will continue to be able to avoid falling into recession despite the weight of much higher interest rates meant to bring down inflation.

The Federal Reserve has said it expects to raise rates one or two more times this year, while the European Central Bank and others have sounded even more aggressive.

For now, the US economy has been holding up better than expected thanks in large part to a remarkably resilient job market. Strong reports on consumer confidence, sales of new homes and other areas of the economy on Tuesday helped lead to a 1.1 per cent rally for the S&P 500. Earlier this month, the S&P 500 reached its highest level since April 2022.

"Following some early week jitters, we've now seen a return to business-as-usual in global equities. Markets are taking some comfort from US economic indicators which are showing no signs of an imminent hard landing' with regard to growth," Tim Waterer, chief market analyst at KCM Trade, said in a report.

Economists are increasingly hopeful a recession may be avoidable, delayed, or that contraction may be limited to specific sectors and not the entire economy.

In the bond market, the yield on the 10-year Treasury slipped to 3.75 per cent from 3.77 per cent late Tuesday. It helps set rates for mortgages and other important loans.

The two-year yield, which moves more on expectations for the Fed, rose to 4.77 per cent from 4.76 per cent.

In Europe, stock indexes were rising. Japan's Nikkei 225 jumped 2.0 per cent as the weakening value of the Japanese yen benefits exporters from the country. Stock indexes elsewhere in Asia moved more modestly and were mixed.(AP) RUP