Market Stumbles as Investors Brace for Earnings Season Amid Rate Uncertainty

Wall Street saw a minor decline on Thursday, as market participants took a breather in the absence of economic triggers or data releases, shifting focus to the upcoming third-quarter earnings season. The S&P 500 and Nasdaq fell slightly from their record highs set on Wednesday, while the Dow saw the largest drop.

Chuck Carlson, CEO of Horizon Investment Services, noted that profit-taking in high-performing sectors contributed to the market's pullback. The recent stock rally, led by advances in artificial intelligence, has sparked fears of a market bubble and possible correction. With the bull market's third anniversary approaching, many still see potential for further growth.

The stalemate in Congress has extended the U.S. government shutdown, depriving investors of key economic data. This has put the spotlight on the Federal Reserve's monetary policy stance. New York Federal Reserve President John Williams has indicated support for more interest rate cuts by year-end. Despite the uncertainty, markets are pricing in a strong likelihood of a rate cut at the Fed's October meeting.

(With inputs from agencies.)