Wall Street drifts as it hits a lull following its big rally

Key Points

• Asian shares mostly declined, with Japan's Nikkei 225 down 0.4% and Australia’s S&P/ASX 200 falling 1.0%, following a pullback in U.S. stocks.
• U.S. Federal Reserve Chair Jerome Powell expressed concerns over stock prices being “fairly highly valued,” as inflation pressures persist alongside rising job market worries.
• Despite a dip in major U.S. indexes, analysts note the Fed has signaled potential interest rate cuts, although they remain cautious about fostering inflation.
• In the bond market, Treasury yields eased, while in energy trading, U.S. crude prices edged up to $63.55 per barrel.

NEW YORK (AP) — U.S. stock indexes are drifting on Wednesday as Wall Street takes a pause from what seemed like a relentless rally.

The S&P 500 was virtually unchanged in morning trading, coming off its first loss in four days. The Dow Jones Industrial Average was up 45 points, or 0.1%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was basically flat. All three are near their all-time highs, which were set on Monday.

It's a slowdown following the blistering run for the U.S. stock market since it hit a low in April, fueled by hopes that President Donald Trump’s tariffs won’t derail global trade and that the Federal Reserve will cut interest rates several times to boost the U.S. economy. The big rally, though, has raised concerns that stock prices have shot too high and become too expensive, particularly if the Fed does not deliver as many cuts to rates as traders expect.

Demonstrating the weight of high expectations, Micron Technology's stock fell 1.8% even though it reported a better profit and revenue for the latest quarter than analysts expected. The maker of computer memory also gave a forecast for profit in the current quarter that blew past analysts' expectations.

Typically, such a performance would send a stock higher. But Micron’s stock came into the day with an atypical, stunning gain of 97.7% for the year so far.

Freeport-McMoRan sank 10.6% for one of the market's larger losses after the miner said it expects sales of copper to be 4% lower in the third quarter than it had earlier forecast. It also said sales of gold will likely be roughly 6% lower than earlier expected.

On the winning side of Wall Street was Lithium Americas. It soared 91.5% following reports that the U.S. government is considering taking an ownership stake in the Canadian company, which is developing a lithium project in Nevada with General Motors.

Lithium Americas, based in Vancouver, said it’s in talks with the U.S. Department of Energy and GM about drawing on a previously announced $2.26 billion loan from the government. The Energy Department is making “incremental requests” to add more conditions before Lithium Americas can make its first draw, among other things, the company said.

Under Trump, the U.S. government has already taken a 10% ownership stake in Intel, the struggling computer chip company.

Homebuilders also rose after a report said U.S. sales of new homes were stronger in August than economists had forecast and unexpectedly accelerated.

Lennar climbed 2%, PulteGroup rose 1.5% and D.R. Horton added 0.7%.

In stock markets abroad, indexes were mixed in Europe and Asia. Hong Kong’s Hang Seng jumped 1.4%, and France’s CAC 40 fell 0.5% for two of the bigger moves.

In the bond market, the yield on the 10-year Treasury edged up to 4.13% from 4.12% late Tuesday.

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AP Business Writers Matt Ott and Yuri Kageyama contributed.