Wall Street’s major indexes were mixed on Tuesday as investors waited for the Federal Reserve’s policy decision and weighed conflicting signals on the future of U.S. AI chip exports to China.
President Donald Trump said he would allow Nvidia to export H200 processors, the company’s second-most powerful AI chips, to China. However, he added that the U.S. would impose a 25% fee on those shipments.
Nvidia shares, which had risen nearly 2% in premarket trade, later slipped 0.7% after a Financial Times report suggested Beijing was preparing to restrict access to those chips. Achilleas Georgolopoulos, senior market analyst at XM, noted that although the agreement excludes Nvidia’s most advanced Blackwell chips, it still supports stable trade relations between the world’s two largest economies.
Shares of AMD and Intel also traded without clear direction, despite Trump signaling that similar export rules would apply to other U.S. semiconductor firms.
By 9:51 a.m. ET, the Dow Jones Industrial Average rose 148.64 points, or 0.30%, to 47,880.89. The S&P 500 gained 8.47 points, or 0.12%, to 6,854.98, while the Nasdaq Composite slipped 32.35 points, or 0.14%, to 23,518.29.
This week’s main focus is the Fed’s two-day meeting, which begins Tuesday and ends with Wednesday’s decision. Recent data shows inflation remains above the Fed’s 2% target, although some indicators point to cooling in parts of the labor market.
According to CME’s FedWatch Tool, traders now assign an 89.6% probability to a 25-basis-point rate cut. Still, policymakers remain divided, with several warning that inflation could accelerate again.
Despite these concerns, markets expect an additional 50 basis points of easing next year as the Fed works to support a softening jobs environment. Rate-cut expectations have fueled risk-taking, pushing the S&P 500 to within 1% of its record high. Small-cap stocks have also outperformed the broader market this quarter.
Investors also monitored a bidding battle involving Paramount, Skydance and Netflix for Warner Bros. The deal speculation has boosted Warner Bros shares by 11% over two sessions, with an additional 1.2% gain in Tuesday’s premarket trading.
Seven of the S&P 500’s 11 sectors traded higher. However, a decline in Paramount weighed on the communication services group.
Home Depot fell 2.5% after issuing a fiscal 2026 sales and profit outlook that missed expectations. In contrast, CVS Health rose 3% after forecasting stronger-than-expected 2026 profit.
Advancers outnumbered decliners 1.69-to-1 on the NYSE and 1.08-to-1 on the Nasdaq. The S&P 500 recorded 10 new 52-week highs and two new lows, while the Nasdaq posted 45 new highs and 31 new lows.
