U.S. stocks fall despite Nvidia boost

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STORY: Wall Street's main indexes closed lower on Thursday despite a surge in Nvidia shares, as data showing stubborn inflation reignited fears the Federal Reserve could delay rate cuts.

The Dow plunged more than 1.5%, the S&P 500 shed nearly three-quarters of a percent and the Nasdaq lost about four-tenths of a percent.

Early in the session, the Nasdaq and S&P hit intraday highs thanks to Nvidia. The company's stock jumped more than 9% to close over the $1000 per share mark for the first time after the AI chip leader reported another blowout quarter. Nvidia shares are up about 110% this year after surging roughly 240% in 2023.

But the indices lost ground after manufacturers reported a surge in input costs, suggesting that goods inflation could pick up in the months ahead - potentially putting off rate cuts from the Fed.

But that's not necessarily bad news, says Greg Halter, Director of Research at Carnegie Investment Counsel.

"I mean if things are so strong, why do we need to be cutting interest rates? We also look at the other side of things. You've now got $6 trillion money market funds earning 5%, versus 0 a year or so ago. That's a lot of money that's going into some consumers' pockets to save or spend, or just keep reinvesting."

Markets are now pricing in about a 52% chance for a rate cut in September, down from nearly 67% a week ago, according to CME's FedWatch Tool.

Other stock movers included Boeing, which dragged down the Dow by tumbling 7.5% after the planemaker forecast negative free cash flow in 2024 due to sluggish deliveries.

And Ticketmaster-owner Live Nation slumped 7.8% after the U.S. Justice Department along with a group of 30 states and the District of Columbia Thursday sued to break up the concert promoter.