Wall Street drifts, Alphabet jumps, Nvidia falls; ASX set to slide

Aramark fell 5.2 percent after the company reported profits below analysts’ expectations in the last quarter. The company, which provides food and facilities management for schools, national parks and convention centers, also said it expects its underlying profit measure to increase between 20 percent and 25 percent next year. Although relatively strong, this was less than analysts had predicted.

Another source of potential frustration for Wall Street is the Federal Reserve’s actions on interest rates. The expectation was that the Fed would continue to lower interest rates to support the slowing employment market. Wall Street likes lower rates because they can provide support to the economy and investment prices.

However, questions are increasing about whether the Fed will make a third interest rate cut for the year at its December meeting; This was something investors had previously seen as very likely. The downside of low interest rates is that they can worsen inflation, which remains stubbornly above the Fed’s 2 percent target.

Fed officials also noted that the U.S. government shutdown delayed the release of job market updates and other signals about the economy. With less information and less certainty about how things are going, some Fed officials have suggested it might be better to wait until December to get more clarity.

Now that the shutdown is over, the government is preparing to release its overdue employment report for September on Thursday. This could create more volatility in the market. Very strong data will probably keep the Fed’s hand in reducing interest rates, while very weak numbers will increase concerns about the economy.

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The Fed is likely to cut interest rates in 2026 simply in response to a slowing economy rather than outpacing it, according to Barry Bannister, chief equity strategist at Stifel. This is not a good environment for stock prices, and Bannister said, “The Fed’s ‘free lunch’ is over.”

In the bond market, the yield on the 10-year Treasury note fell from 4.14 percent to 4.12 percent at the end of Friday.

Indices on stock markets abroad experienced moderate declines in most of Europe and Asia.

The Tokyo Nikkei 225 index fell 0.1 percent after the government reported that the Japanese economy contracted at an annual rate of 1.8 percent in the July-September quarter.