Wall Street steadies after Nvidia, Palantir and other AI stars trim
their losses
[August 21, 2025] By
STAN CHOE
NEW YORK (AP) — U.S. stock indexes ended mixed on Wednesday after Nvidia,
Palantir and other superstar stocks pared most of their steep losses
from the morning.
The S&P 500 dipped 0.2% after trimming a loss that reached 1.1% earlier
in the day and remains near its an all-time high set last week. The Dow
Jones Industrial Average added 16 points, or less than 0.1%, and the
Nasdaq composite fell 0.7%.
The day’s action centered again around stocks caught up in the mania
around artificial-intelligence technology.
Nvidia, whose chips are powering much of the world’s move into AI, sank
as much as 3.9% during the morning and was on track to be the heaviest
weight on Wall Street following its 3.5% fall on Tuesday.
But it clawed back nearly all of Wednesday’s drop and finished with a
dip of just 0.1%. As it pared its loss, so did broad market indexes
because Nvidia is Wall Street’s most influential stock by being its most
valuable.
Palantir Technologies, another AI darling, fell 1.1% to add to its 9.4%
loss from the day before, but it had been down as much as 9.8% Wednesday
morning.
One possible contributor to the swoon was a study from MIT’s Nanda
Initiative that warned that most corporations are not yet seeing any
measurable return from their generative AI investments, according to
Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth
Management.
But the larger factor may be the simple criticism that prices for such
stock simply shot too high, too fast amid the furor around AI and became
too expensive. Nvidia, whose profit report scheduled for next week is
one of Wall Street’s next major events, had soared 35.5% for the year so
far heading into Tuesday. Palantir had surged even more, more than
doubling.
The tech stocks still have supporters, though, who say AI will bring the
next generational revolution in business.
Mixed profit reports from big U.S. retailers helped keep the rest of the
market in check.
TJX, the company behind the TJ Maxx and Marshalls stores, climbed 2.7%
after beating analysts’ forecasts for profit and revenue. It also raised
its forecast for profit over its full fiscal year, while CEO Ernie
Herrman said TJX is seeing “strong demand at each of our U.S. and
international businesses” and that its current quarter is off to a
strong start.
Lowe’s added 0.3% after the home-improvement retailer delivered a profit
for the latest quarter that topped analysts’ expectations.
Target, meanwhile, tumbled 6.3%. The struggling retailer said that CEO
Brian Cornell plans to step down Feb. 1 and that an insider, 20-year
veteran Michael Fiddelke, will replace him. He helped reenergize the
company, but it has struggled to turn around weak sales in a more
competitive post-COVID retail landscape.
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Trader Richard Cohen works on the floor of the New York Stock
Exchange, Monday, Aug. 18, 2025. (AP Photo/Richard Drew)
 Estee Lauder dropped 3.7% after
offering a forecast for profit this upcoming fiscal year that fell
short of Wall Street’s estimates. The beauty company said it expects
tariffs to shave roughly $100 million off its upcoming earnings.
La-Z-Boy sank 12.1% after the furniture maker’s profit and revenue
for the spring came up shy of analysts’ expectations.
All told, the S&P 500 fell 15.59 points to 6,395.78. The Dow Jones
Industrial Average added 16.04 to 44,938.31, and the Nasdaq
composite fell 142.10 to 21,172.86.
The week’s biggest news for Wall Street is likely arriving on
Friday, when Federal Reserve Chair Jerome Powell will give a highly
anticipated speech in Jackson Hole, Wyoming. The hope on Wall Street
is that Powell will hint that cuts to interest rates are coming
soon.
The Fed has kept its main interest rate steady this year, primarily
because of the fear of the possibility that President Donald Trump’s
tariffs could push inflation higher. But a surprisingly weak report
on job growth across the country may be superseding that.
Treasury yields have come down sharply on expectations for an easing
of interest rates, and the yield on the 10-year Treasury fell to
4.29% from 4.30% late Tuesday.
Trump has been angrily calling for lower interest rates, often
insulting Powell personally while doing so. Trump on Wednesday
called on a top official at the Federal Reserve, Lisa Cook, to
resign after a member of his administration accused her of
committing mortgage fraud.
In stock markets abroad, indexes were mixed across Europe and Asia.
London’s FTSE 100 rose 1.1% despite a report that said inflation in
the U.K. rose more than expected through July, in part due to
soaring airfares and food prices.
Hong Kong’s Hang Seng added 0.2%. Shares that trade there of Chinese
toy company Pop Mart International Group soared 12.5% after its CEO
said its annual revenue could top $4 billion this year and announced
the release of a mini version of its popular Labubu dolls.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
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