NEW YORK (AP) — U.S. stocks are drifting on Tuesday as Wall Street waits to hear what the Federal Reserve will say on Wednesday about where interest rates are heading.
The S&P 500 was virtually unchanged and remained near its all-time high
, which was set in October. The Dow Jones Industrial Average was down 124 points, or 0.3%, with less than an hour remaining in trading, and the Nasdaq composite was 0.2% higher.Exxon Mobil was one of the strongest
forces pushing upward on the market. It climbed 2.3% after increasing its forecast for profit over the next five years, thanks in part to strength for its fields in the Permian basin in the United States and off Guyana’s shore.
But JPMorgan Chase dragged on the market after a top executive, Marianne Lake, said expenses for the bank could hit $105 billion next year. That would be up 9% from an estimated $95.9 billion this year, though Lake also said JPMorgan Chase is “feeling pretty good about the underlying financial health of the borrowers in our portfolio.” Its stock fell 3.9%.
Another drop came from Toll Brothers, which fell 1.2% after the homebuilder reported weaker results for the latest quarter than analysts expected.
CEO Douglas Yearley Jr. said demand for new homes remains soft across many markets. But he pointed to how his company’s luxury homes aim more at affluent customers, who may be less hurt by “affordability pressures” than other potential homebuyers.
One big factor in that affordability question is mortgage rates. They’re cheaper than they were at the start of the year, though they perked up a bit after October. That’s largely because of questions in the bond market about how much more the Federal Reserve will cut its main interest rate.
The widespread expectation is that the Fed will cut interest rates Wednesday afternoon, which would be the third such easing of the year. Lower interest rates can give the economy and prices for investments a boost, but the downside is they can worsen inflation.
The U.S. stock market has run to the edge of its records in part because of the near assumption that the Fed will cut rates again on Wednesday.
The big question is what the Fed will say about where interest rates will go after that. Many on Wall Street are bracing for talk aimed at tamping down expectations for more cuts in 2026.
Inflation has stubbornly remained above the Fed’s 2% target, and Fed officials are notably split in their opinions about whether high inflation or the slowing job market is the bigger threat to the economy.
Treasury yields climbed in the bond market after a report on Tuesday showed that U.S. employers were advertising 7.7 million job openings at the end of October. That's up a smidgen from the month before and the highest since May.
If the job market is not worsening, it may not need as much help from the Fed through more cuts to rates.
After the report on job openings came out, the yield on the 10-year Treasury erased what had been an earlier dip. It rose to 4.18% from 4.17% late Monday.
The yield on the two-year Treasury, which moves more closely with expectations for what the Fed will do, rose to 3.60% from 3.57% late Monday.
Elsewhere on Wall Street, Ares Management climbed 8.9% after S&P Dow Jones Indices said the investment company will join its widely followed S&P 500 index. It will replace Kellanova, the maker of Pringles and Pop-Tarts, which is being bought by Mars, the company behind Snickers and M&Ms.
CVS Health rose 3.1% after unveiling new financial forecasts, including expectations for annual compounded growth in earnings per share at a “mid-teens” percentage over the next three years.
“We are committed to doing what we say,” said Chief Financial Officer Brian Newman, who also said CVS Health is closing out 2025 with strong momentum.
Home Depot fell 0.9% after flipping earlier between gains and losses. It gave a preliminary forecast for 2026 that said the broad home improvement market may shrink by up to 1%. But it also gave a separate set of forecasts saying its earnings per share could grow in the mid- to high-single digit percentages if the housing market recovers.
The market’s most influential stock, Nvidia, slipped 0.7% after President Donald Trump allowed it to sell an advanced chip used in artificial-intelligence technology to “approved customers” in China. The H200 is not Nvidia’s top product.
In stock markets abroad, indexes were mixed Europe and Asia.
Indexes fell 1.3% in Hong Kong and 0.7% in Paris for two of the world’s bigger moves.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
