US equity indexes traded lower ahead of the close on Wednesday as the so-called Magnificent 7 tech stocks lagged and the Federal Reserve's July meeting minutes revealed divisions among policymakers.
The Nasdaq Composite dropped 1% to 21,108.5, the S&P 500 fell 0.5% to 6,382.6, and the Dow Jones Industrial Average slid less than 0.1% to 44,893.2. Classic growth sectors such as technology, consumer discretionary, and communication services were the sole decliners. Energy, a value play, was the top gainer.
A note from the MIT Media Lab's Project NANDA concluded that 95% of organizations are seeing no business return despite spending $30 billion to $40 billion on generative AI, according to a report from Virtualization & Cloud Review. "Just 5% of integrated AI pilots are extracting millions in value, while the vast majority remain stuck with no measurable P&L impact."
Index heavyweights Amazon (AMZN), Nvidia (NVDA), and Apple (AAPL) accounted for three out of the top five laggards on the Dow. On the Nasdaq and the S&P 500, Intel (INTC) and Micron Technology (MU) were among the five worst performers.
The minutes of the July 29-30 Federal Open Market Committee meeting revealed divisions among those who see inflation as the greater concern, those who see risks higher for employment growth, and those who see a balance.
Most FOMC members, however, saw potential inflation pressures outweighing risks to the labor market and indicated it would take time to gain more clarity on the exact impact of tariffs on prices.
Most US Treasury yields remained lower following the release of the minutes. The 10-year yield slid 1.5 basis points to 4.29% and the two-year rate slipped one basis point to 3.74%.
In geopolitical news, diplomatic efforts to reach a deal to end Russia's war on Ukraine continued.
White House press secretary Karoline Leavitt confirmed to reporters that the Trump administration is working with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky to facilitate a bilateral meeting, CNN reported Wednesday.
West Texas Intermediate crude oil futures rose 1.3% to $63.14 a barrel.
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