NEW YORK (AP) โ U.S. stocks are heading toward a quiet end to the week on Friday, as Nvidia stock continues to cool after its surprising supernova run.
The S&P 500 was down 0.2% in morning trading, although it is still near its all-time high set on Tuesday. The Dow Jones Industrial Average was up 49 points, or 0.1%, as of 10 a.m. ET, and the Nasdaq composite was down 0.3%.
Nvidia dragged the market again after falling 2.9%. The company's shares have soared more than 1,000% since October 2022 due to frenetic demand for its chips, which are driving much of the global movement towards artificial intelligence technology, and this week it briefly supplanted Microsoft as the company most valuable on Wall Street.
But nothing goes up forever, and Nvidia's declines over the past two days have put its stock on track for its first losing week in the last nine.
Much of the rest of Wall Street was relatively quiet, save for a few outliers.
Sarepta Therapeutics jumped 35.3% after US regulators approved its drug for use in children with Duchenne muscular dystrophy who are at least 4 years old.
CarMax rose 2% after generating earnings last quarter that beat analysts' expectations.
Gunmaker Smith & Wesson Brands fell 12.6% despite reporting stronger fourth-quarter earnings than analysts expected. Summer is traditionally a slower season for firearms, according to CEO Mark Smith.
Trading could see many changes during the day, with wide swaths of futures and options contracts to buy stocks and other types of investments about to expire.
In the bond market, U.S. Treasury yields initially fell after a report suggested that business activity among countries that use the euro is weaker than economists expected. There are already major concerns on the continent ahead of a French election that could further shake financial markets.
Weak business activity reports dragged down yields in Europe, initially putting pressure on Treasury yields. But U.S. yields recovered much of those losses after a subsequent report indicated that U.S. business activity could be stronger than previously thought.
Overall output growth hit a 26-month high, according to S&P Global's preliminary reading of activity among U.S. manufacturing and services companies. Perhaps most importantly for Wall Street, that strength may be occurring without a simultaneous increase in inflation pressure.
"Historical comparisons indicate that the latest decline brings the survey's price indicator in line with the Federal Reserve's 2% inflation target," according to Chris Williamson, chief business economist at S&P Global Market Intelligence.
The Federal Reserve is in a precarious situation, where it is trying to slow the economy through high interest rates enough to get inflation back down to 2%. The trick is that you want to cut rates at exactly the right time. If it is too late, the slowdown in the economy could lead to a recession. If it's too soon, inflation could accelerate again.
There is still hope among traders that the Federal Reserve can achieve this, with many predicting at least two interest rate cuts later this year, according to data from CME Group. Of course, their predictions have historically been overly optimistic.
Federal Reserve officials themselves have planned one or two cuts in 2024 to their main interest rate, which has remained at its highest level in more than two decades.
The 10-year Treasury yield rose to 4.25% from 4.26% late Thursday. The two-year Treasury yield fell from 4.74% to 4.72%.
In foreign stock markets, many Asian indices also fell. Hong Kong's Hang Seng fell 1.7% and South Korea's Kospi fell 0.8%.
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AP business writer Yuri Kageyama contributed.
