US stocks fell on Wednesday as Wall Street digested mixed messaging from Fed officials on US interest rates.

The S&P 500 (^GSPC) slid 0.3% while the Dow Jones Industrial Average (^DJI) declined by about 0.4%, The tech-heavy Nasdaq Composite (^IXIC) dropped 0.3%. The declines marked a reversal from the indexes' earlier gains.

Debate over the prospects for US interest rate cuts — the big focus for markets right now — appeared to pressure stocks. Comments from Federal Reserve officials this week have hinted at growing disagreement on what the path of policy should be, given the cracks showing in the labor market.

Fed Chair Jerome Powell reiterated in a speech on Tuesday that the central bank would proceed cautiously on further rate cuts, even as he left the door open to more easing. He also described stocks as "fairly highly valued."

Wall Street is now counting down to the release of the Fed's preferred inflation gauge, the Personal Consumption Expenditures index, on Friday. Markets are watching for reassurance that inflation isn't posing a threat to high expectations for two more rate cuts this year.

On Wednesday, fresh data from the Commerce Department's Census Bureau showed new home sales unexpectedly surged in August as mortgage rates began to ease, bringing homebuyers off the sidelines and releasing pent-up demand. Still, affordability concerns for homebuyers persist.

Meanwhile, some tech stocks are showing gains despite a broader drop across the Nasdaq, which snapped a winning streak on Tuesday amid losses for the "Magnificent Seven" Big Tech stocks.

Alibaba stock (BABA) jumped 8% as investors welcomed the Chinese tech giant's pledge to hike its AI spending beyond its original $50 billion target. The boost is needed for Alibaba to keep pace as global investment in AI surges to $4 trillion, its CEO said.

Tesla (TSLA) shares climbed 4% and were on track to close at their highest level in 2025 as analysts at investing firm Mizuho Securities lifted their price outlook on the stock to $450, noting the EV maker is seeing only a "muted" impact from tariffs and boosting optimism for the company's robotaxi ambitions.

At the same time, Micron's (MU) stronger-than-expected quarterly earnings delivered a positive signal for the AI trade, though shares in the memory chipmaker — which supplies semiconductors for Nvidia's (NVDA) AI systems — fell on Wednesday.

Stocks fell for a second day in a row on Wednesday as big AI spending plans from e-commerce giant Alibaba (BABA) and a rally in Tesla (TSLA) shares were not enough to keep the market momentum going.

The S&P 500 (^GSPC) slipped 0.3%. The Dow Jones Industrial Average (^DJI) declined by about 0.4%, The tech-heavy Nasdaq Composite (^IXIC) dropped 0.3%.

The declines came as investors parsed recent Fed member commentary about the central bank's path forward.

Alibaba stock jumped as much as 10% as the Chinese tech giant's pledged to hike its AI spending beyond its original $50 billion target.

Tesla shares climbed as much as 4% after analysts at investing firm Mizuho Securities lifted their price outlook on the stock to $450.

Gold (GC=F) has outpaced both stocks and crypto this year, and its run could be a bullish signal for bitcoin’s next move.

The precious metal is up more than 40% year-to-date, compared to a more than 12% gain in the S&P 500 (^GSPC) and a 20% increase in bitcoin (BTC-USD).

September is typically a volatile month for the world’s largest cryptocurrency, though the final quarter of the year often brings seasonal tailwinds for digital assets.

Sean Farrell, head of digital asset strategy at Fundstrat, noted that gold tends to front-run bitcoin.

\\"Gold generally has at least over the past few years, has led bitcoin rallies,\\" Farrell said during a client video on Tuesday evening.

\\"I think that that is just, it bodes well for bitcoin. In Q4, I think really we just need to wait,\\" he said.

Yahoo Finance's Francisco Velasquez reports:

Artificial intelligence may offer retailers big gains, but it won't be their saving grace.

In a note to clients, Morgan Stanley analyst Alex Straton wrote that agentic AI could represent an estimated \\"$6B total cost savings opportunity\\" for some of America's biggest retailers, boosting profit estimates by as much as 20% by 2026.

The report ranks Gap (GAP), Macy's (M), and Victoria's Secret (VSCO) as the \\"stand out\\" trio best positioned to capture the benefits.

Straton's analysis combines two measures: an \\"AI\\" reward that models potential operating-cost savings and an AI \\"recognition\\" score based on how often companies mention AI in transcripts.

At its midpoint, the bank's framework estimates roughly $6 billion in annual cost savings from agentic AI tools such as inventory planning, supply chain automation, and automated customer service. If realized, that could add about 200 basis points to sector margins.

Read more here.

Yahoo Finance's Jennifer Schonberger reports:

Treasury Secretary Scott Bessent said Wednesday the Trump administration is looking for someone with an \\"open mind\\" to be the next chair of the Federal Reserve as he interviews 11 candidates to replace Jerome Powell.

\\"Everyone asks me what am I looking for when I interview potential Federal Reserve chairs, and it's just someone with an open mind, who's not looking in the rearview mirror, who's looking forward,\\" Bessent said in an interview on Fox Business Network's \\"Mornings with Maria.\\"

Bessent expects to complete the first round of interviews by the first week in October. He noted that he has been surprised by the strength of some candidates but declined to name them on Wednesday. The Treasury secretary has said that he plans to present Trump with a small list of the strongest candidates.

The new comments are the latest indication that Bessent is widening his scope as the White House continues its search for someone to assume the post now held by Powell, whose term as chair runs out next May.

Read more here.

Meta (META) shares moved up fractionally Wednesday after CEO Mark Zuckerberg said that Instagram has reached 3 billion monthly active users.

Meta's stock is up roughly 28% in 2025, ahead of the 17% gain for the entire group of \\"Magnificent Seven\\" Big Tech stocks.

Meta has been rapidly expanding its AI investments, twice raising its capital expenditure forecasts for the 2025 fiscal year.

The Facebook and Instagram parent on Tuesday said the company upped its investments in an AI-enabled Alabama data center to $1.5 billion. And plans to power its massive Louisiana data center have been approved despite public concerns over higher energy bills and water shortages that could emerge from the project.

Fresh data from the Census Bureau Wednesday showed new home sales unexpectedly surged in August as mortgage rates began to ease, bringing homebuyers off the sidelines and releasing pent-up demand.

New home sales jumped over 20% to a seasonally adjusted annualized rate of 800,000 units in August — more than the 650,000 units expected by economists, Reuters reported.

Still, affordability concerns for homebuyers continue.

Homebuilders are often more willing to cut prices and offer incentives to lure buyers than sellers of older homes, so it remains to be see if recent rate relief is enough to bring the housing market out of its funk.

Intel (INTC) shares jumped nearly 5% on Wednesday, putting the stock on track to close at its highest in a year.

The move comes as Treasury Secretary Scott Bessent said in an interview on Fox's \\"Mornings with Maria\\" that the US's decision to take a stake in Intel was \\"validated\\" by Nvidia's (NVDA) move to invest $5 billion in the struggling chipmaker last week.

To be sure, Nvidia CEO Jensen Huang told reporters in a press conference at the time of the announcement that the two companies had been discussing a collaboration for nearly one year and that the US government had no involvement in those discussions.

The US made an $8.9 billion investment in Intel in August, taking a roughly 10% stake in the company. Intel is the only large-scale, leading-edge US-based chip manufacturer, and the success of its manufacturing business is seen by many as significant to national security.

Tesla stock jumped more than 3% Wednesday, leading the \\"Magnificent Seven\\" Big Tech stocks as Mizuho Securities analyst Vijay Rakesh lifted his price outlook on shares to $450 from $375.

Rakesh said Tesla is expected to see a \\"minimal impact\\" from US tariffs. He said the proposed trillion-dollar pay package for Elon Musk and Musk's $1 billion Tesla stock purchase could \\"could align mgmt [managementincentives to push toward our blue sky scenario of increasing humanoid robots/robotaxi adoption.\\"

Tesla's gain put the stock on track to close at its highest level in 2025 after jumping to a year-to-date high earlier this week.

Shares in Marvell Technology (MRVL) rose over 3% after the US chipmaker said its board has authorized a new $5 billion stock buyback.

CEO Matt Murphy said the move \\"reflects our conviction in the business and the intrinsic value of our stock,\\" according to a company statement on Wednesday.

Marvell makes custom chips for companies including Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOGL), and Meta (META), per Bloomberg data. The company also struck a partnership with Nvidia (NVDA) this year to allow customers to integrate its chips into the tech giant's AI systems.

\\"Our strong balance sheet provides us the flexibility to continue investing in long-term growth, particularly as we pursue the large and expanding opportunity in accelerated infrastructure for AI,\\" Murphy said.

The chipmaker's earnings and revenue have surpassed Wall Street's expectations in four of its past five quarterly reports.

Despite Wednesday's gain, its shares are down roughly 30% in 2025 so far.

Micron (MU) stock fell over 2% early Wednesday despite its quarterly earnings results surpassing Wall Street's expectations.

The memory chipmaker, which supplies its HBM (high bandwidth memory) chips to Nvidia (NVDA) for the tech giant's AI systems, reported fourth quarter revenue and earnings and first quarter guidance above Wall Street analysts' projections Tuesday after the bell.

The beat was seen as a positive signal for the AI trade as Micron's CEO said he expects \\"trillions of dollars to be invested in AI\\" in the coming years. Analysts across Wall Street lifted their price targets on the stock following the results.

But Hedgeye Risk Management analysts, who hold a short position on Micron, noted that its HBM revenue for the quarter (the three months ending Aug. 28) was below expectations, coming in at \\"nearly $2 billion\\" versus the $2 billion projected.

Micron has risen to prominence as one of two suppliers of HBM to Nvidia's AI systems amid a wave of investment in AI data centers, alongside Korea-based rival SK Hynix (000660.KS).

The world's other major memory chipmaker, Samsung (005930.KS), has fallen behind, but the Korean tech giant recently qualified to supply its HBM3E memory chips to Nvidia, adding competition for Micron.

\\"Our Short thesis is predicated on MU losing material market share to Samsung next year on HBM,\\" Hedgeye Risk Management analysts wrote in a note on Wednesday.

US stocks rose at the open on Wednesday as Alibaba's (BABA) plans to hike its artificial intelligence spending lifted hopes for a continuation of the AI-fueled tech rally.

The tech-heavy Nasdaq Composite (^IXIC) and the Dow Jones Industrial Average (^DJI) moved up nearly 0.3%, while the S&P 500 (^GSPC) nudged around 0.2% higher.

Chinese tech and chipmaker stocks got a lift on Wednesday following an 8% rise in Alibaba (BABA) stock after the company announced its growing AI spending ambitions.

Shares of SMIC (0981.HK), China's largest semiconductor foundry, rose 5% while Hua Hong (1347.HK) added nearly 4% in Hong Kong. In Shanghai, shares of Cambricon (688256.SS), a challenged to Nvidia (NVDA), gained 1.7%.

The moves came after Alibaba revealed plans to spend more than $50 billion on artificial intelligence in order to keep up with the pace of investment from other large tech leaders.

Also helping the stock were increased bets from Cathie Wood's Ark Invest. The firm reopened two positions in Alibaba stock and also invested in other Chinese stocks, including Baidu (BIDU) and Pony AI (PONY).

Baidu stock climbed 3%, while Pony AI stock advanced 2%.

Lithium Americas (LAC) stock jumped about 70% higher ahead of the opening bell on Wednesday after Reuters reported that the Trump administration is seeking an equity stake of as much as 10% in the company.

The Trump administration is intervening in the company as a way of renegotiating a $2.26 billion Department of Energy loan granted under the Biden administration for the Thacker Pass lithium project. Trump has also pushed for the US to take stakes in Intel (INTC), MP Materials (MP), and other companies seen as critical to national security.

The Thacker Pass mining project, which Lithium Americas is undertaking with General Motors (GM), is slated to become the Western Hemisphere's largest source of lithium when it opens in 2028, per Reuters, as well as a key project in bolstering the US's lithium supply chain.

Lithium Americas confirmed that it's in discussions with the Energy Department and GM regarding the Thacker Pass project and said \\"the company continues to work with the DOE and GM regarding proposals for a mutually agreeable resolution.\\"

Read more here.

European defense stocks rose on Wednesday after President Trump reversed his position on the Russia-Ukraine war, saying that Ukraine could regain all its territory and calling Russia a \\"paper tiger.\\"

Germany's Rheinmetall (RHM.DE) rose 2%, while the country's Hensoldt (HAG.DE) and Sweden's SAAB (SAAB-B.ST) added over 4% on an overall down day for the major European indexes. UK’s BAE Systems (BA.L) gained about 1%.

\\"I think Ukraine, with the support of the European Union, is in a position to fight and WIN all of Ukraine back in its original form,\\" Trump said on Truth Social on Tuesday afternoon. \\"With time, patience, and the financial support of Europe and, in particular, NATO, the original Borders from where this War started, is very much an option.\\"

Earlier on Tuesday, Trump told reporters that NATO countries should shoot down Russian military aircraft in their airspace, though he said it \\"depends on the circumstance\\" if the US would back up its allies.

Last week, the Fed voted to cut interest rates in a decision that expressed unity despite a sole dissent. But a mere week later, commentary from central bankers is foreshadowing disagreement to come, noted Yahoo Finance's Hamza Shaban.

He reports in today's takeaway from Morning Brief:

While Powell represents the consensus at the Fed, other policymakers don't view caution as the appropriate posture, since, in their view, the labor market is already flagging.

New Federal Reserve governor Stephen Miran said Monday he wants central bank interest rates to be roughly 2 percentage points lower, arguing that the current level is too high, posing risks to the economy.

Miran's remarks are hardly surprising. He was the dissenting vote at the September policy meeting after being installed by the White House amid its campaign to lower rates. He's even taking a leave of absence from his (still current) role as a White House economic adviser.

But while it might be tempting to cast Miran and his views as a sideshow on the losing side of an 11-to-1 vote, his influence is likely to grow as he works to convince his colleagues to adopt a more dovish approach — and as the conversation evolves from unity into an array of opinions.

Even now, he isn't exactly alone.

Read more here.

Economic data: MBA mortgage applications (week ending Sept. 19) New home sales (August); Building permits (August)

Earnings calendar: Cintas Corporation (CTAS), Uranium Energy Corp (UEC), KB Home (KBH)

Here are some of the biggest stories you may have missed overnight and early this morning:

The Fed's unity is already fraying

AI's big power problem sets natural gas up for a boom

Alibaba soars after hiking AI budget past $50 billion

Lithium Americas surges as Trump admin. seeks stake

S&P 500 resists drops of 2% in best run in over a year

Defense stocks jump in Europe, Asia after Trump's Ukraine shift

Crypto giant Tether seeks funding at $500 billion valuation

India seeks more US energy as trade talks resume

Here's a look at some of the top stocks trending in premarket trading:

Lithium Americas (LAC) stock soared 64% in premarket trading on Wednesday after the Trump administration said it is seeking an equity stake of as much as 10% in the company.

General Motors (GM) stock rose 3% before the bell on Wednesday after Citi increased its price target for the stock to $75 from $61.

Micron (MU) stock fell 1% in premarket trading on Wednesday following the release of its fourth quarter earnings report the day prior.

Micron Technology (MU) did its part this week to contribute to the AI bullishness.

Here's what the memory chipmaker's execs said on an earnings call last night, when asked about the demand outlook:

\\"In terms of the demand profile and what is shaping up looking ahead, certainly, the large hyperscalers are looking like they will be needing significantly more storage capability for their AI server deployment, because they have shortages on that side from the HDD segment of the market.

And so the deployment of NAND SSDs and servers and data centers more broadly is going to increase in calendar 2026. So we expect, driven by that tailwind, for the NAND industry conditions to start improving.\\"

Couple this with the $100 billion Nvidia (NVDA) and OpenAI (OPAI.PVT) deal this week, and Alibaba (BABA) saying today it would spend more than $50 billion over three years on AI models, and it's hard to play the bear hand on AI names right now.

It has been a hot minute since markets had to worry about a government shutdown.

We have been here before, and a shutdown is usually averted last minute. That's why the market tends to take the ordeal in stride until it absolutely can't.

Helpful context on the latest brewing debacle from Deutsche Bank strategist Jim Reid:

\\"Whilst Fed speakers provided the main headlines, an important developing story has been on the potential for a US government shutdown next week. For those who haven’t been following, government funding currently runs out on September 30, unless Congress vote to authorise more spending. And even though the Republicans have a majority in both chambers of Congress, they need 60 votes in the Senate to avoid a filibuster, when they only have 53 among themselves. Meanwhile, the Democrats are calling for an extension of healthcare subsidies, so there’s an impasse as it stands.

There had been a meeting planned between President Trump and the House and Senate Democratic leaders, but Trump cancelled the meeting yesterday, posting that “I have decided that no meeting with their Congressional Leaders could possibly be productive.” So that cancellation has led to a fresh bout of concern that funding will run out at next week’s deadline, and we could see the first shutdown since the winter of 2018-19. Meanwhile, Trump’s main appearance yesterday was a combative speech at the UN, as he accused the organisation of offering only “empty words” and criticised other countries’ climate and immigration policies. Trump later seemed to give his clearest support to Ukraine yet suggesting that the country is in a position to win all its territory back. So that was a change in emphasis.\\"

A lot has been thrown at the market so far in September — a month that seasonally isn't often great from a historical perspective.

But here we are, getting bullish AI comments from Alibaba (BABA) and Nvidia (NVDA) this week, and a rate cut last week.

Good point this morning from the host of the Yahoo Finance Trader Talk podcast, Kenny Polcari:

\\"We have 5 more trading days until the end of the month and the end of the quarter. By all accounts, it has been good for both – So far, we are up 9% for the quarter and 3.7% for the month. I for one am surprised that we saw the strength this month that we saw, but there is always October.\\"