NEW YORK (AP) — Wall Street’s rally stalled on Wednesday after U.S. stocks climbed back within 2% of their all-time high.
The S&P 500 fell 0.3% for its first loss in four days. The Dow Jones Industrial Average was virtually unchanged after edging down by 1 point, and the Nasdaq composite slipped 0.5%.
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A trader watches his monitors as he works on the floor of the New York Stock Exchange, Tuesday, June 10, 2025. (AP Photo/Richard Drew)
Specialist Meric Greenbaum works at his post on the floor of the New York Stock Exchange, Tuesday, June 10, 2025. (AP Photo/Richard Drew)
Pedestrians pass by an electronic stock board showing Japan's Nikkei index at a securities firm in Tokyo, Wednesday, June 11, 2025. (AP Photo/Louise Delmotte)
A board above the New York Stock Exchange trading floor displays the closing number for the Dow Jones industrial average, Tuesday, June 10, 2025. (AP Photo/Richard Drew)
Pedestrians pass by an electronic stock board showing Japan's Nikkei index at a securities firm in Tokyo, Wednesday, June 11, 2025. (AP Photo/Louise Delmotte)
Pedestrians pass by an electronic stock board showing Japan's Nikkei index at a securities firm in Tokyo, Wednesday, June 11, 2025. (AP Photo/Louise Delmotte)
Several Big Tech stocks led the way lower, and a 1.9% drop for Apple was the heaviest weight on the market. It’s been listless this week after unveiling several modest upcoming changes to the software that runs its devices.
The action was stronger in the bond market, where Treasury yields eased after a report suggested President Donald Trump’s tariffs are not pushing inflation much higher, at least not yet.
U.S. consumers had to pay prices for food, gasoline and other costs of living that were 2.4% higher overall in May than a year earlier. That was up from April’s 2.3% inflation rate, but it wasn’t as bad as the 2.5% that Wall Street was expecting.
A fear has been that Trump’s wide-ranging tariffs could ignite an acceleration in inflation, just when it had seemed to get nearly all the way back to the Federal Reserve’s 2% target from more than 9% three summers ago. It hasn’t happened, though economists warn it may take months more to feel the full effect of Trump’s tariffs.
“Another month goes by with little evidence of tariffs, but the longer-term inflation challenge they pose remain,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
Financial markets also had only modest reactions to the conclusion of two days of trade talks between the United States and China in London.
Trump said Wednesday that China will supply rare-earth minerals and magnets to the United States, while his government will allow Chinese students into U.S. universities in a deal that still needs an agreement by him and by China’s leader. Trump also said that “President XI and I are going to work closely together to open up China to American Trade. This would be a great WIN for both countries!!!”
Investors are still hoping for a more sweeping trade deal that would ease tensions between the world’s two largest economies.
Hopes for such deals between the United States and countries around the world have been one of the main reasons the S&P 500 has charged nearly all the way back to its all-time high after dropping roughly 20% below a couple months ago. Without them, the fear is that Trump’s high tariffs could drive the economy into a recession while pushing inflation higher. The S&P 500 is now sitting 2% below its record.
On Wall Street, Chewy dropped 11% after the seller of pet supplies reported a weaker profit for the latest quarter than analysts had forecast. Expectations were high after its stock had already rallied nearly 37% coming into the day for the year so far.
Tesla swung between gains and losses before finishing with a rise of 0.1% to continue its shaky run. It’s been recovering much of its big losses taken last week after Elon Musk’s relationship with Trump imploded, which in turn raised fears about a loss of business for the electric-vehicle company. Musk on Wednesday backed away from some of his earlier comments and said they went “too far.”
All told, the S&P 500 fell 16.57 points to 6,022.24. The Dow Jones Industrial Average slipped 1.10 to 42,865.77, and the Nasdaq composite sank 99.11 to 19,615.88.
In the bond market, the yield on the 10-year Treasury eased to 4.41% from 4.47% late Tuesday. Shorter-term yields, which more closely track expectations for what the Fed will do with overnight interest rates, fell more.
Wednesday’s better-than-expected reading on inflation raised expectations along Wall Street that the Fed could cut its main interest rate at least twice by the end of the year.
The Fed has been keeping interest rates steady so far this year, going on pause after cutting rates at the end of last year. It has been waiting to see how much Trump’s tariffs raise inflation because cutting interest rates could push inflation up even more, in addition to giving the economy a boost.
“The Fed could be justified in doing some preemptive rate cuts,” said Brian Jacobsen, chief economist at Annex Wealth Management. “They were afraid that inflation would rise before growth would slow, but the script has been flipped and they will likely change their tune.”
In stock markets abroad, indexes fell across much of Europe after rising in Asia. South Korea’s Kospi was one of the best performers and jumped 1.2%.
AP Business Writer Yuri Kageyama contributed.
A trader watches his monitors as he works on the floor of the New York Stock Exchange, Tuesday, June 10, 2025. (AP Photo/Richard Drew)
Specialist Meric Greenbaum works at his post on the floor of the New York Stock Exchange, Tuesday, June 10, 2025. (AP Photo/Richard Drew)
Pedestrians pass by an electronic stock board showing Japan's Nikkei index at a securities firm in Tokyo, Wednesday, June 11, 2025. (AP Photo/Louise Delmotte)
A board above the New York Stock Exchange trading floor displays the closing number for the Dow Jones industrial average, Tuesday, June 10, 2025. (AP Photo/Richard Drew)
Pedestrians pass by an electronic stock board showing Japan's Nikkei index at a securities firm in Tokyo, Wednesday, June 11, 2025. (AP Photo/Louise Delmotte)
Pedestrians pass by an electronic stock board showing Japan's Nikkei index at a securities firm in Tokyo, Wednesday, June 11, 2025. (AP Photo/Louise Delmotte)
Attallah Tarazi recently received Christmas presents that included socks and a scarf to shield him against the Gaza winter, and he joined some fellow Palestinian Christians in a round of hymns.
“Christ is born,” the group sang in Arabic. “Hallelujah.”
The presents and hymns offered the 76-year-old a taste of the holiday in a devastated Gaza, where a fragile ceasefire has provided some relief, but the losses of the Israel-Hamas war and the ongoing struggles of displaced people are dampening many traditional festivities.
Tarazi and much of the rest of Gaza’s tiny Palestinian Christian community are trying to capture some of the season’s spirit despite the destruction and uncertainty that surround them. He clings to hope and the faith that he said has seen him through the war.
“I feel like our joy over Christ's birth must surpass all the bitterness that we’ve been through," he said. He's been sheltering for more than two years at the Holy Family Church compound in Gaza, where a church group including choir members toured among displaced people this Christmas season, he said.
“In such a glorious moment, it’s our right to forget all that’s war, all that’s danger, all that's bombardment."
But for some, the toll is inescapable.
This will be the first Christmas for Shadi Abo Dowd since the death of his mother, who was among those killed in July when an Israeli attack hit the same Catholic church compound where Tarazi lives and which has been housing displaced people. Israel issued statements of regret and said it was an accident.
Abo Dowd said his son was wounded in the assault that also hurt the parish priest.
Ahead of Christmas, the Latin patriarch of Jerusalem, Cardinal Pierbattista Pizzaballa, paid a visit to the Holy Family Parish. A patriarchate statement said the visit marked the beginning of Christmas celebrations in "a community that has lived and continues to live through dark and challenging times.”
Abo Dowd, an Orthodox Christian who observes Christmas on Jan. 7, said he does not plan to celebrate beyond religious rituals and prayers. “There’s no feast,” he said.
“Things are difficult. The wound is still there," he said. “The suffering and pain are still there.”
He added: "We’re still living in a state of no peace and no war."
Israeli strikes have decreased since the ceasefire agreement took effect in October, but deadly attackshave not entirely ended. Israel and Hamas have traded accusations of breaking the truce and the more challenging second phase has yet to be implemented.
The war began when Hamas-led militants stormed into Israel on Oct. 7, 2023, killing some 1,200 people and taking about 250 hostages.
Israel’s ensuing offensive has killed nearly 71,000 Palestinians in Gaza, according to Gaza’s Health Ministry, which does not differentiate between civilians and combatants but says around half the deaths were women and children.
The ministry, which operates under the Hamas-run government, is staffed by medical professionals and maintains detailed records viewed as generally reliable by the international community.
Israel’s offensive in Gaza has also caused widespread destruction and displaced the vast majority of the territory’s some 2 million residents. Highlighting some of the many struggles and needs of the enclave and its people was torrential rain that recently flooded displacement camps and collapsed already badly damaged buildings.
“I always tell my children, ‘God only gives the toughest battles to his strongest soldiers,’" Abo Dowd said. “We’re holding onto our Christian faith and onto our country, and we love our country."
He and others know of many Christians among those who fled Gaza during the war and more who hope to leave if given the opportunity. He worries about the effect on the Christian presence and on Gaza’s social fabric. “It's a tragedy,” he said.
His children would like to study abroad. “They're young. What will they stay to do? There's no future."
The departure of many relatives and friends means Christmas doesn’t feel the same for 23-year-old Wafa Emad ElSayegh.
He and family members gathered with others at Gaza’s Greek Orthodox church compound to put up decorations. But the absence of friends who escaped Gaza fueled his nostalgia.
“We used to be together in everything,” said ElSayegh, who’s now staying with his family at the home of an aunt who left Gaza during the war.
His favorite part of Christmas was the togetherness — the family gatherings, the celebratory events that he said drew Christians and some Muslims, and the excitement of children receiving gifts.
“There would be celebrations, songs and an indescribable joy that we, unfortunately, haven’t felt in a long time,” he said. And with many relatives away, he said the usual Christmas atmosphere cannot be recreated.
Elynour Amash, 35, is trying to bring some of that cheer to her children “through decorating and lighting the tree so they can feel that joy is possible despite all pain."
“My children feel a little bit of joy, like breathing after a long period of suffocation,” she said in written responses to The Associated Press. “They’re happy they’re celebrating without fear of a nearby explosion and because some chocolates and sweets have returned to their lives, in addition to foods that they had long been deprived of.”
She's thankful her home is still standing, but the scenes of displaced people in tents that cannot shield them from the cold and rain often drive her to tears.
“The sounds of explosions and gunfire can still be heard, and the fear hasn’t left the hearts. There’s continuous worry that the ceasefire won't last.” She sees the toll in her youngest, who trembles when he hears loud noises.
“It’s as if the war lives inside of him," she said. "As a mother, that pain is indescribable."
She also worries that someday Christians could disappear from Gaza. But, for now, “our presence, no matter how small, is a testimony of love, steadfastness and faith in this land,” she said.
Tarazi is determined to stay.
Early in the war, he lost a sister, who was among those killed when an Israeli airstrike hit the Orthodox church compound housing displaced people. The Israeli military said it had targeted a nearby Hamas command center. Tarazi said a brother also died after he could not get needed medical care due to the war.
He prays for peace and freedom for the Palestinian people. “Our faith and our joy over Christ's birth are stronger than all circumstances,” he said.
Associated Press religion coverage receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content.
Cardinal Pierbattista Pizzaballa, the Latin Patriarch of Jerusalem, second left, leads a mass ahead og Christmass celebrations at the Holy Family Catholic Church in Gaza City, Sunday, Dec. 21, 2025. (AP Photo/Jehad Alshrafi)
Palestinians parishioners attend a mass led by Cardinal Pierbattista Pizzaballa, the Latin Patriarch of Jerusalem, ahead of Christmas celebrations in Gaza City, Sunday, Dec. 21, 2025. (AP Photo/Jehad Alshrafi)
Children and nuns gather outside the Holy Family Catholic Church before attending a mass ahead of Christmas celebrations in Gaza City, Sunday, Dec. 21, 2025. (AP Photo/Jehad Alshrafi)
Cardinal Pierbattista Pizzaballa, the Latin Patriarch of Jerusalem, poses for the photos with Palestinian parishioners after leading a mass ahead of Christmas celebrations at the Holy Family Catholic Church in Gaza City, Sunday, Dec. 21, 2025. (AP Photo/Jehad Alshrafi)
