© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri/File Photo/File Photo
By Caroline Valetkevitch
NEW YORK (Reuters) – The Dow and ended slightly lower on Tuesday as investors remained worried the Federal Reserve will keep interest rates higher for longer and as banks shares eased.
The closed close to unchanged. Financials were the biggest drag on the S&P 500. An S&P downgrade of multiple regional U.S. lenders weighed on bank shares, with both the KBW regional banking index and the S&P 500 banks index sharply lower.
Investors will seek clarity on the rate outlook when Fed Chair Jerome Powell speaks at a meeting of central bankers on Friday in Jackson Hole, Wyoming.
“Rates have backed up pretty good again, so that’s kind of putting somewhat of a damper on stocks,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
The benchmark hit its highest in almost 16 years on the view the Fed could keep rates higher for longer. Higher borrowing costs can slow spending by businesses and consumers.
According to preliminary data, the S&P 500 lost 11.90 points, or 0.27%, to end at 4,387.87 points, while the Nasdaq Composite gained 10.01 points, or 0.07%, to 13,507.60. The Dow Jones Industrial Average fell 173.04 points, or 0.50%, to 34,290.65.
Investors also eagerly awaited results and a forecast from chip heavyweight Nvidia (NASDAQ:) due after the bell on Wednesday. Nvidia surprised investors with its strong forecast in May, fueling a rally in its own and other tech stocks amid artificial intelligence hopes.
Shares of Nvidia hit an all-time high of $481.87 early but were lower on the day.
Department stores were also among the day’s decliners. Macy’s (NYSE:) fell after the chain warned of weak consumer spending through the crucial holiday shopping season. Shares of Kohl’s Corp (NYSE:). and Nordstrom Inc (NYSE:) also were down sharply.
