S&P 500 closes lower, snapping 3-day winning streak, as AI trade in Nvidia fizzles; Powell hints stocks are overvalued

The three leading U.S. indexes finished Tuesday's session lower.

The S&P 500 dropped 0.55% to 6,656.92, and the Nasdaq Composite declined 0.95%, ending at 22,573.47. The Dow Jones Industrial Average dropped 88.76 points, or 0.19%, to settle at 46,292.78.

— Sean Conlon

Morgan Stanley is months away from offering crypto trading to retail customers through its E-Trade division as the Wall Street giant embraces what it called a transformative moment for the wealth management industry.

The firm is working with the startup Zerohash — which Morgan Stanley also took an investment stake in — for liquidity, custody and settlement around crypto trading, according to a memo obtained by CNBC.

"We are well underway in preparing to offer crypto trading through a partner model to E-Trade clients in the first half of 2026," Jed Finn, head of wealth management at Morgan Stanley, said in the memo.

Read more here.

— Hugh Son

IonQ on Tuesday said it achieved a "significant quantum internet milestone," leading shares 3% higher in afternoon trading and lifting quantum stocks in sympathy during the session. Shares of Rigetti Computing gained 10%, D-Wave Quantum added 6% and Quantum Computing rose 4%.

IonQ announced in a press release that, with research support from the Air Force Research Lab, the company is the first to successfully demonstrate the ability to convert visible wavelengths used to interface with trapped barium ions into telecom wavelengths on a prototype system. "This critical milestone paves the way for interconnecting quantum computers over vast distances using the current existing fiber optic infrastructure," the press release reads.

IonQ CEO Niccolo de Masi said in a statement that the company "will soon connect two quantum computers over standard wavelengths, opening the floodgates for broadly networked quantum devices using commercial fiber infrastructure."

Shares of IonQ are up about 78% year to date. The stock reached a fresh 52-week high on Tuesday.

— Pia Singh

Federal Reserve Governor Michelle Bowman warned Tuesday that policymakers are "at serious risk of already being behind the curve" in dealing with the weakening labor market.

"I am concerned that the labor market could enter into a precarious phase and there is a risk that a shock could tip it into a sudden and significant deterioration," she added during a speech in North Carolina.

A permanent voter on the Federal Open Market Committee, she backed the decision last week to lower the overnight borrowing rate by a quarter percentage point. In addition, she said the cut "should be the first step" in an ongoing easing back to a neutral rate.

Bowman advocated shifting the Fed's focus to the employment side of its dual mandate, as she believes tariffs will exact only a "short-lived" impact on inflation.

— Jeff Cox

Shares of Boeing rose more than 1% on Tuesday after President Donald Trump in a Truth Social post praised Uzbekistan's president, Shavkat Mirziyoyev, for signing a "GREAT Deal" with the aerospace company.

Boeing's agreement with Uzbekistan Airways was secured on Monday on the margins of the 80th United Nations General Assembly in New York City, Reuters reported.

"Worth over $8 Billion Dollars, Uzbekistan Airways is purchasing 22,787 Dreamliners. This will create over 35,000 jobs in the United States. President Mirziyoyev is a man of his word, and we will continue to work together on many more items! Thank you for your attention to this matter," Trump wrote in his social media post.

Also boosting shares was news that the U.S. and China are in the final stages of a "huge" deal for Boeing aircraft, per a Bloomberg report.

— Pia Singh

Federal Reserve Chair Jerome Powell suggested Tuesday that valuations are elevated at current levels.

"We do look at overall financial conditions, and we ask ourselves whether our policies are affecting financial conditions in a way that is what we're trying to achieve," he said. "But you're right, by many measures, for example, equity prices are fairly highly valued."

This comes as the three leading indexes closed at yet another record on Monday. The S&P 500 in particular also notched its fourth straight intraday high Tuesday.

— Sean Conlon

Johnson & Johnson is poised to grow due to its innovative medicine business, according to Guggenheim.

The investment firm upgraded Johnson & Johnson to buy from neutral. It raised its price target for the company to $160 from $147.

"While questions around U.S. drug pricing reform and potential pharma tariffs may impact how generalists view the broader biopharma space, we see JNJ at a point in its lifecycle where its product story and growth outlook can make it one of the preferred names in an otherwise challenged sector," Guggenheim analyst Vamil Divan said Monday in a note to clients.

The price target hike comes as Johnson & Johnson clinches approvals for cancer treatments that could book big profits in the near future. The company's drug device and delivery systems, Inlexzo (TAR-200) and TAR-210, are poised to rake in more than $6 billion in sales, Guggenheim noted. Some J&J drugs, including Darzalex and Rybrevant/Lazcluze, also seem poised to gain traction in cancer treatment.

The global market for pharmaceutical drugs is expected to grow more than 35% to $2.2 trillion by the end of 2029, according to global market research firm BCC Research.

— Liz Napolitano

AutoZone shares fell more than 3% after the aftermarket auto parts retailer reported fiscal fourth quarter earnings and revenue that came in weaker than expectations.

The company posted earnings of $48.71 per share, lower than the consensus estimate of $50.73 per share, according to FactSet. Revenue of $6.24 billion came in slightly below the forecasted $6.25 billion.

— Sarah Min

Gold hit a fresh intraday all-time high of 3,824.6 on Tuesday, on pace for its 37th record close in 2025. Gold is already up more than 44% year to date.

The Gold Miners ETF gained 0.5% in late morning trading and was at all-time highs. Shares of B2Gold, Pan American Silver, Fortuna Mining, Coeur Mining and Kinross Gold were all higher.

— Gina Francolla, Sarah Min

Higher medium- and long-term interest rates are here to stay, according to Vanguard.

The Federal Reserve, which shapes the short end of the curve, is unlikely to ease substantially as it faces inflation above its 2% target for the fifth consecutive year, as well as a labor market that still remains in balance by historical standards, Kevin Khang, the firm's senior international economist, wrote in a note Thursday.

In addition, long-term yields are impacted not just by Fed policy but by expectation about future rates and the premium investors expect from holding longer-duration bonds, Khang said. He sees those structural forces potentially working against a sustained drop in yields.

"For long-term investors, the real story is not whether the Fed cuts once or twice more in the remainder of 2025, but how they adapt to a world where structurally higher rates—and the forces behind them—are likely here to stay," Khang wrote.

— Michelle Fox

Silver has hit highs not seen in nearly a decade and a half.

The metal has climbed more than 50% this year, rising to levels last seen in 2011.

The move comes amid a rally in metals amid expectations that the Federal Reserve and other central banks will let inflation run hotter than they have historically. Notably, gold notched its 36th record close of 2025 on Monday.

— Alex Harring

The S&P 500 and Nasdaq Composite were little changed on Tuesday morning.

The broad market index, along with the tech-heavy Nasdaq, traded around the flatline shortly after the opening bell.

Meanwhile, the Dow Jones Industrial Average rose 49 points, or 0.3%.

— Sean Conlon

Check out the companies making headlines before the bell:

• Firefly Aerospace — The aerospace company fell more than 10% after posting its first quarterly report since going public last month. Firefly saw a wider loss and lower revenue than expected for the second quarter.
• AutoZone — The automotive parts retailer fell 2% after its gross profits and earnings per share came in below Wall Street's expectations for the fiscal fourth quarter, despite an increase in same-store sales during the same period.
• Kenvue — Shares bounced more than 4% in premarket trading, recouping some of its losses from the prior session when it slid more than 7% after the Trump administration drew an unproven link between autism and acetaminophen in Tylenol during pregnancy.

Read here for the full list.

— Sarah Min

Kenvue shares rose 5% in the premarket on Tuesday, recovering some of its losses in the previous trading day, on the heels of President Donald Trump making unproven claims of ties between Kenvue's Tylenol and autism.

On Monday, the stock dropped 7.5%, reaching a new 52-week low, in anticipation of the president's announcement.

"Taking Tylenol is not good," Trump said during Monday's press conference. "They are strongly recommending that women limit Tylenol use during pregnancy unless medically necessary. That's for instance, in cases of extremely high fever, that you feel you can't tough it out, you can't do it."

Kenvue said in a statement Monday that it believes in "independent, sound science" that shows taking acetaminophen – the active ingredient in Tylenol – does not cause autism, adding that "we strongly disagree with any suggestion otherwise and are deeply concerned with the health risk this poses for expecting mothers."

— Sean Conlon, Annika Kim Constantino

The Organisation for Economic Co-operation and Development upgraded its global economic growth forecast on Tuesday, with many economies appearing more resilient than expected so far this year.

The OECD now expects global growth of 3.2% this year, compared to the 2.9% expansion it had forecast in June. Expectations for 2026 were unchanged at 2.9%. This would mark a slowdown from the 3.3% growth seen in 2024.

Growth expectations for the U.S. were also lifted, to 1.8% for 2025, compared to June's 1.6% estimate. This still marks a significant fall from 2024′s 2.8% growth, however. The organization forecasts 1.5% growth for the U.S. in 2026.

"Global growth was more resilient than anticipated in the first half of 2025, especially in many emerging-market economies," the OECD said in a new report.

Read more.

— Sophie Kiderlin

A highly anticipated meeting between the U.S. and Chinese presidents is more likely to take place next year than this fall, U.S. Ambassador to China David Perdue said Tuesday.

"We're looking forward to getting together, as President Trump said, and potentially in the near future, but certainly next year," Perdue said. His comments came during a press conference with a group of U.S. lawmakers on a rare visit to Beijing — the first since 2019.

Read more here.

— Victoria Yeo, Evelyn Cheng

Nvidia shares were down 0.6% in the premarket a day after the tech giant rose nearly 4% on the back of a $100 billion deal with OpenAI. Monday's gain marked the stock's third straight day of gains.

— Fred Imbert

Nvidia's plans to invest as much as $100 billion in OpenAI to support the artificial intelligence company's data center build out is yet another reminder of rising needs for electricity.

In Monday's session, shares of stocks expected to benefit from rising power demand rallied. Constellation Energy gained 4.9%, Vistra Energy rose 3.1%, Oklo jumped 3.8%, and Talen Energy added 1.5%. Vistra, Oklo and Talen hit fresh intraday highs. However, nearly all of these stocks were lower in the extended trading Monday evening.

— Christina Cheddar Berk

Shares of Firefly Aerospace dropped about 12.5% after Monday's close on the back of its financial results, the first to come out since the rocket maker's Nasdaq debut in early August.

Firefly posted a wider loss and lower-than-expected revenue in its second quarter. The company reported a loss of $80.3 million for the quarter, compared with a loss of $58.7 million in the year-ago period. Firefly's revenue for the period fell to $15.5 million compared with $21.1 million a year ago, while analysts polled by FactSet expected $16.8 million.

"We ended the second quarter with a total backlog of approximately $1.1 billion. In addition, we have a robust pipeline of revenue opportunities that is incremental to the backlog conversion," the company said in its earnings call.

The stock is up roughly 9.12% month to date. The company has several spacecraft vehicles in production, and earlier this year successfully guided its Blue Ghost lander to the moon, marking the first fully successful commercial moon landing."

— Pia Singh

Shortly after 6 p.m. ET on Monday, the S&P 500 was less than 0.1% lower, while the tech-heavy Nasdaq Composite was little changed. The Dow Jones Industrial Average edged lower by 22 points, or about 0.1%.

— Pia Singh