US stocks close in red as Fed chair says equities 'fairly highly valued'

​​​​​​​By Mucahithan Avcioglu

ISTANBUL (AA) - The New York Stock Exchange ended Tuesday with losses after Fed Chair Jerome Powell said equity prices, a group that usually consists of stocks and other risky investments, are "fairly highly valued."

The Dow was down 0.19%, or 88.76 points, to close at 46,292.78.

The Nasdaq dipped 0.95%, or 215.50 points, to close at 22,573.47, while the S&P 500 was off 0.55%, or 36.83 points, to 6,656.92.

The three indices initially started the day with a mixed course ahead of Powell's speech, but turned red after his remarks.

“We do look at overall financial conditions, and we ask ourselves whether our policies are affecting financial conditions in a way that is what we’re trying to achieve,” said Powell. “But you’re right, by many measures, for example, equity prices are fairly highly valued.”

Previously, the broader market had entered a rally, hitting record levels as the central bank cut the policy rate last week for the first time this year, and the expectations for further rate cuts increased.

Powell noted that the weakness in the job market led to the recent rate cut, as the risk in the slowing labor market outweighed inflation concerns.

"Near-term risks to inflation are tilted to the upside and risks to employment to the downside -- a challenging situation," Powell told business leaders in the state of Rhode Island. “Two-sided risks mean that there is no risk-free path.”

While other Fed officials' remarks are being monitored, Chicago Fed President Austan Goolsbee said additional interest rate cuts should be considered cautiously due to inflation remaining above target and trending upward.

Atlanta Fed President Raphael Bostic expressed his belief that vigilance should continue in the fight against inflation.

Fed Board Member Michelle Bowman stated that policymakers face the risk of falling behind due to the weakening labor market and they must take decisive action to lower interest rates.

On the macroeconomic data side, the US manufacturing Purchasing Managers' Index (PMI) came in at 52 in September, below expectations.

The country's current account deficit narrowed by 42.9% to $251.3 billion in the second quarter.

On the corporate side, Nvidia shares, which rose after it announced a strategic partnership with artificial intelligence firm OpenAI to invest up to $100 billion in the company, fell 2.8%.