Wall Street drifts lower as U.S. stocks slow their roll

A dealer watches computer monitors at a dealing room of Hana Bank in Seoul, South Korea, Wednesday, May 28, 2025. (AP Photo/Lee Jin-man)

U.S. stocks drifted lower on Wednesday, cooling down a day after leaping within a few good days’ worth of gains from their all-time high.

The S&P 500 fell 0.6%, but it’s still within 4.2% of its record after charging higher amid hopes that the worst of the turmoil caused by U.S. President Donald Trump’s trade war may have passed. It had been roughly 20% below the mark last month.

The Dow Jones Industrial Average dipped 244 points, or 0.6%, and the Nasdaq composite slipped 0.5%.

Trading was relatively quiet in the countdown to Wednesday’s main event for financial markets, the latest quarterly earnings release for Nvidia. That came after trading ended for the day. Before that, the AI darling’s stock slipped 0.5%.

Expectations were high for the bellwether of the frenzy around artificial-intelligence technology. So are worries that its stock price may have run too high, even after it has largely stalled this year.

Like Nvidia, Macy’s stock also swung up and down through much of the day, even though it reported milder drops in revenue and profit for the latest quarter than analysts expected.

The retailer maintained its forecast for revenue this year, but it cut its profit forecast in part because of tariffs and some moderation of spending by consumers. Its stock ended the day down 0.3%.

Several other retailers likewise delivered better-than-expected results for the latest quarter. Abercrombie & Fitch soared 14.7% after its profit and revenue topped analysts’ expectations. CEO Fran Horowitz credited broad-based growth across its business around the world, and strength for its Hollister brand offset weakness for its Abercrombie brand.

Dick’s Sporting Goods added 1.7% after topping analysts’ expectations for the latest quarter, and it stood by its financial forecasts it earlier gave for the full year.

On the losing end of Wall Street was Okta, which fell 16.2% even though the identity and access management company reported better results for the latest quarter than Wall Street expected. Analysts called it a solid performance, but investors may have been looking for even more after its stock came into the day up nearly 60% for the year so far.

Video-game retailer GameStop fell 10.9% after saying it had bought 4,710 bitcoin, which is worth more than $500 million at its current price. The company said in late March that it could begin buying bitcoin to store some of the cash in its treasury.

All told, the S&P 500 fell 32.99 points to 5,888.55. The Dow Jones Industrial Average dropped 244.95 to 42,098.70, and the Nasdaq composite fell 98.23 to 19,100.94.

In the bond market, the yield on the 10-year Treasury rose to 4.47% from 4.43% late Tuesday.

The bond market showed relatively little reaction after the Federal Reserve released the minutes from its latest meeting earlier this month, when it left its benchmark lending rate alone for the third straight time. The central bank has been holding off on cuts to interest rates, which would give the economy a boost, amid worries about inflation staying higher than hoped because of Trump’s sweeping tariffs.

Sharp swings in Treasury yields last week rattled markets worldwide, as they rose in part on worries about the U.S. government’s rapidly rising debt levels. Such swings have also hit Japan, where an auction of 40-year Japanese government bonds on Wednesday drew less interest from potential buyers than it’s seen since July.

After years of pumping money into the economy by buying loads of Japanese government bonds, Japan’s central bank has been gradually cutting back, undermining demand at a time when other institutional investors also have been buying fewer Japanese government bonds. Fewer buyers for bonds pushes up their yields.

In stock markets abroad, indexes were modestly lower across much of Europe and Asia.

South Korea was an exception, where the Kospi jumped 1.3% thanks in part to gains for Samsung Electronics and other tech companies.

Stan Choe, The Associated Press