NEW YORK MARKET CLOSE: Shares mixed as Fed minutes highlight inflation

(Alliance News) - Shares ended mostly lower in New York on Wednesday as the sell-off in technology stocks continues, while minutes from July's Federal Open Market Committee meeting showed participants still wary of inflation.

On Wall Street, the Dow Jones Industrial Average closed up 16.04 points, up marginally, at 44,938.31. The S&P 500 fell 15.59 points, 0.2%, to 6,395.78. The Nasdaq Composite ended down 142.09 points, 0.7%, to 21,172.86.

Technology shares again led losses on Wednesday. Nvidia eased 0.1%, Broadcom declined 1.3% and AMD slid 0.8%. Palantir fell 1.1% and Meta dropped 0.5%. Apple gave back 2.0%.

Intel shed 7.0% as talks continue over a possible US Government stake in the company.

"It has been a miserable week for tech stocks in the US, which have caught a bad case of the AI chills," said IG analyst Chris Beauchamp.

"The mini-panic induced by Altman's comments and the MIT article have not yet subsided, though in most cases this is still a trimming of recent gains rather than any bigger rout. It is August, after all, and as thoughts turn to Jackson Hole on Friday we are bound to see some prudent derisking."

Minutes from the FOMC's July meeting showed the majority of participants agreed that a "still solid" labor market and "moderately or modestly restrictive" monetary policy made the Committee "well positioned" to respond in a timely way to potential economic developments.

At that meeting, the FOMC voted to maintain rates at the 4.25%-4.50% range, its fifth straight hold. But two members dissented, with governors Christopher Waller and Michelle Bowman backing a quarter-point cut.

"Participants generally pointed to risks to both sides of the Committee's dual mandate, emphasising upside risk to inflation and downside risk to employment," the minutes noted.

While "a majority of participants judged the upside risk to inflation as the greater of these two risks" a couple saw "downside risk to employment the more salient risk."

Officials assessed that the effects of higher tariffs had become more apparent in the prices of some goods but that their overall effects on economic activity and inflation "remained to be seen".

They noted that it would take time to have more clarity on the "magnitude and persistence" of higher tariffs.

However, the dissenters argued that excluding tariff effects, inflation was running close to the FOMC's 2% objective and that higher tariffs were unlikely to have persistent effects on inflation.

Minutes also highlighted increased downside risk to employment as economic growth and consumer spending slow, as well as some data pointing to weakening labor market conditions.

Analog Devices reported better than expected third quarter earnings as the firm shook off tariff concerns.

Net income in the three months to August 2 rose 32% to USD518.5 million, as revenue climbed 25% to USD2.88 billion. Adjusted diluted earnings per share were 30% higher year-on-year at USD2.05.

Analog Devices had expected an adjusted EPS between USD1.82 and USD2.02, while its revenue forecast was USD2.75 billion, give or take USD100 million.

"While tariffs and trade fluctuations are creating market uncertainty, the demand for ADI's products remains robust," said Chair and Chief Executive Officer Vincent Roche said. "The company's relentless focus on cutting-edge innovation positions us to capitalize on the growth of the intelligent physical edge. In addition, our diverse and resilient business model enables ADI to navigate various market conditions and consistently create long-term value for our shareholders."

Chief Financial Officer Richard Puccio said the company ended the quarter with "continued backlog growth and healthy bookings trends".

Analog Devices closed up 6.3%.

Alcon shares fell as it reported weaker second quarter results and cut 2025 guidance.

Reporting after the bell on Tuesday, Alcon said net income declined 21% to USD176 million in the three months to June 30. Diluted earnings per share were USD0.35 compared to USD0.45.

Net sales climbed 4.0% to USD2.58 billion. Of this, Total Surgical revenue rose 2.8% to USD1.46 billion. Total Vision Care revenue improved by 5.7% to USD1.12 billion.

Chief Executive David Endicott said the firm exited the quarter with "solid momentum" despite a "relatively soft" first half surgical market.

Even so, Alcon has cut 2025 revenue guidance to between USD10.3 billion and 10.4 billion, down from USD10.4 billion to 10.5 billion projected previously. It now sees core operating margin of 19.5% to 20.5%, cut from 20% to 21%.

Alcon sank 10%.

Alphabet's Google on Tuesday said it struck a deal for the Australian Associated Press to help train its AI chatbot Gemini.

The deal would help deliver real-time information to "enhance" responses in Gemini, said Nic Hopkins, Google's head of news partnerships for Australia and New Zealand.

The newswire said it would ensure timeliness and accuracy in the information Gemini provides.

Financial details of the agreement were not provided. It follows a similar deal agreed in January between AFP and Mistral.

Alphabet closed down 1.1%.

Late Wednesday, the US 10-year Treasury was at 4.29%, narrowing from 4.30% late Tuesday. The yield on the US 30-year Treasury was at 4.89%, narrowing from 4.90%.

The pound traded at USD1.3455 late Wednesday, down from USD1.3488 at the New York close on Tuesday. The euro rose to USD1.1657 from USD1.1647. Against the yen, the dollar was at JPY147.26, down from JPY147.53 on Tuesday.

Gold was quoted at USD3,348.10 an ounce late on Wednesday, up from USD3,316.77 on Tuesday.

Brent was quoted at USD66.51 a barrel on Wednesday, up from USD65.46 on Tuesday. West Texas Intermediate rose to USD62.96 from USD61.93.

In Europe, the FTSE 100 closed up 1.1% in London. The CAC 40 eased 0.1% in Paris. The DAX 40 fell 0.6% in Frankfurt.

In Asia, the Nikkei 225 in Tokyo lost 1.5%. In China, the Shanghai Composite closed up 1.0%, while the Hang Seng Index in Hong Kong rose 0.2%. The S&P/ASX 200 closed up 0.3% in Sydney.

Thursday's corporate calendar has half year results from Walmart, Workday and Zoom.

The global economic diary has US natural gas stocks and the Conference Board leading index. Eurozone data prints include flash composite PMI and construction output.

By Aidan Lane, Alliance News reporter

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