US stocks' record breaking rally took a breather on Tuesday, as investors weighed cautious comments from Federal Reserve officials and worries about the sustainability of the AI-driven trade. The S&P 500 fell 0.5%, the Nasdaq 100 dropped 0.7%, and the Dow Jones declined 88 points. Nvidia slid 2.8% after Monday’s surge linked to its $100 billion OpenAI investment, as investors questioned the deal’s structure and energy demands, while Oracle and Amazon dropped 4.1% and 3.1%, respectively. On the upside, Kenvue rose 1.7% after mitigating losses from Trump’s criticism of Tylenol, and Boeing climbed 2% on an $8 billion order from Uzbekistan Airways. Fed Chair Powell described equity prices as “fairly highly valued” and underscored the challenge of balancing inflation risks with a weakening labor market. Other Fed officials echoed caution, with Fed Goolsbee warning against rekindling inflation and Michelle Bowman noting that rate cuts could accelerate if job losses increase.