US stocks fall sharply as Fed's Jerome Powell says December rate cut not a foregone conclusion

US stocks fell sharply on Wednesday as Federal Reserve chairperson Jerome Powell said a December rate cut was not a foregone conclusion.

"A December rate cut is not a foregone conclusion. Far from it," Powell said at a press conference soon after the Fed announced a 25 bps rate cut amid a government shutdown cast a shadow over economic outlook.

At 2.45 pm ET, the Dow Jones fell 170.61 points, or 0.36%, to 47,473.39; the S&P 500 declined 25.10 points, or 0.36%, to 6,851.33; and the Nasdaq slipped 6.89 points, or 0.03%, to 23,764.00.


Earlier in the day, shares of Nvidia rose 2.2%, storming past the milestone, after CEO Jensen Huang announced $500 billion in AI chip orders and plans to build seven supercomputers for the U.S. government.

The stock has surged over 50% this year, spearheading Wall Street’s AI-driven rally. Apple and Microsoft each crossed the $4 trillion market cap mark on Tuesday amid growing optimism over AI partnerships.

"Investors expect Nvidia and other tech companies to continue to beat earnings estimates, not only for this quarter but for future quarters. This bull market for tech remains very much intact," said Sam Stovall, chief investment strategist at CFRA Research.

Upcoming results from Meta, Microsoft, and Alphabet could determine the fate of the AI trade that has powered the record-setting U.S. stock market rally.