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Wall Street slips and ends an 8-day winning streak
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Wall Street slips and ends an 8-day winning streak

NEW YORK (AP) — U.S. stocks declined slightly Tuesday, ending an eight-day winning streak, the longest of the year.

The S&P 500 lost 0.2 percent, but is still only 1.2 percent below its all-time high hit last month, recovering from its frightening plunge in the summer when the index briefly fell nearly 10 percent below its record.

The Dow Jones Industrial Average fell 61 points, or 0.2 percent, and the Nasdaq Composite lost 0.3 percent.

Nvidia was the heaviest weight on the market after falling 2.1 percent. The chipmaker is one of the most influential stocks on Wall Street as the hype surrounding artificial intelligence has turned it into one of the most valuable companies on the US stock exchange, valued at around $3 trillion.

Nvidia has largely recovered from its summer slump, when its share price fell by more than 20 percent as investors feared that prices may have been over-priced and over-inflated. However, the stock remains uncertain ahead of the release of quarterly results scheduled for next week.

Boeing also weighed on the market after its shares fell 4.2 percent.

US safety authorities are demanding inspections of the Boeing 787 Dreamliner cockpit seats. Boeing has also halted test flights of a new version of its 777 jetliner after a damaged structural part was discovered between the engine and the rest of the plane. The new model has not yet been approved by regulators.

Palo Alto Networks helped limit the market’s losses. The cybersecurity company rose 7.2% after becoming the latest major company to report higher earnings and revenue for the latest quarter than analysts expected. Companies in the S&P 500 are on track to post their best earnings-per-share growth since the end of 2021, according to FactSet.

Lowe’s also beat analysts’ earnings forecasts in the spring, but the stock remained more cautious. The home improvement retailer said it was facing a difficult economic environment, “especially for homeowners,” and lowered its sales and profit forecasts for the current fiscal year. The stock fell 1.2 percent.

High interest rates are weighing on the economy after the Federal Reserve raised them sharply to bring inflation under control. US Treasury yields fell on Tuesday ahead of a speech by Federal Reserve Chairman Jerome Powell on Friday that is likely to be the highlight of the week for financial markets.

The economic symposium in Jackson Hole, Wyoming, where Powell will speak, has been the site of major policy announcements in the past. This time, expectations are not as high, as almost everyone already agrees that the Fed will begin cutting interest rates next month.

The biggest question is whether the economy just needs the Federal Reserve to release the brakes, or whether it needs an additional push that requires deeper and faster cuts.

A surprisingly weak report on U.S. employer hiring last month raised concerns that the Fed had kept interest rates too high for too long, but subsequent data on everything from inflation to U.S. retail sales bolstered optimism.

The yield on 10-year Treasury notes fell to 3.81% from 3.87% late Monday.

On Wall Street, shares of the company behind Hawaiian Airlines rose 11.3% after it announced that its planned merger with the company behind Alaska Airlines had cleared a major regulatory hurdle. A deadline for U.S. antitrust authorities to review the deal has expired.

Alaska Air Group shares remained essentially unchanged.

Overall, the S&P 500 lost 11.13 points to 5,597.12. The Dow lost 61.56 points to 40,834.97 and the Nasdaq fell 59.83 to 17,816.94.

On foreign stock markets, the Japanese Nikkei 225 rose by 1.8 percent, making up for its heavy losses from the previous day. Tokyo has seen some of the world’s most violent price movements recently after the Japanese central bank raised interest rates there last month.

That surge triggered losses in markets around the world because it forced many hedge funds to suddenly abandon a popular trade in which they borrowed cheap Japanese yen and invested it elsewhere. It also included the worst day for the Japanese stock market since the Black Monday crash of 1987.

However, the subsequent reassurance from the Bank of Japan regarding interest rates and better-than-expected data on the US economy helped calm the market.

The recovery in US stocks after a scary few weeks is another reminder of how dangerous it is to time the market right. Anyone who sold their stock investments earlier this month when the panic was high would have missed the S&P 500’s recent eight-day winning streak.

Historically, a market’s best and worst days often occur in quick succession, during recessions or declining markets, says Veronica Willis, global investment strategist at the Wells Fargo Investment Institute.

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AP business writer Matt Ott contributed.

Stan Choe, The Associated Press

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