Major stock indices on Wall Street closed lower on Tuesday as investors awaited independent data and comments from U.S. Federal Reserve officials for clues about economic weakness and monetary policy amid the absence of economic data due to the government shutdown.

The three indices fell after a New York Fed consumer expectations survey showed deteriorating future outlooks and rising inflation expectations. The report received heightened scrutiny amid federal data blackout caused by a partisan dispute in Congress, extending the government shutdown into its seventh day.

Investors turned to secondary independent data and policymakers’ comments to assess the likelihood of a second Federal Reserve interest rate cut this year at the upcoming policy meeting.

The S&P 500 lost 25.75 points, or 0.38%, closing at 6714.53, while the Nasdaq Composite dropped 155.52 points, or 0.68%, to 22786.14 after retreating from record levels during the day. The Dow Jones Industrial Average fell 91.99 points, or 0.20%, to 46602.98.

Tesla shares declined Tuesday after unveiling lower-cost models, while a chipmaker boosted gains following a major AI deal. Electric vehicle maker’s shares dropped about 5% after announcing cheaper versions of Model 3 and Model Y, with prices starting around $35,000 and $38,000 respectively. Some analysts noted the cheaper models were not as affordable as hoped.

AMD shares rose notably on a day of semiconductor sector weakness, gaining 3.8%, adding to Monday’s 24% jump thanks to the chipmaker’s partnership with OpenAI.

Other semiconductor and AI-related stocks, including Lam Research and Applied Materials, manufacturers of chipmaking equipment, fell along with Oracle shares after a report suggested its cloud computing profit margins might be lower than expected. Seagate Technology, a hard drive maker that had surged recently on anticipated data storage demand from AI technologies, dropped 7.3%, leading losses in the S&P 500.

Ford Motor shares fell about 6% after reports of a fire at an aluminum plant in Oswego, New York, expected to disrupt operations for months.

AppLovin (APP), an advertising technology company, rose 7.6%, marking its best daily performance on the S&P 500, recovering some Monday losses amid reports of a U.S. Securities and Exchange Commission investigation into its data collection practices. Oppenheimer analysts acknowledged the probe could cause short-term volatility but maintained an “outperform” rating on AppLovin, signaling continued positive long-term expectations.

PayPal shares rose nearly 5% after the fintech company announced the launch of an ad management service for small businesses. PayPal stated that small businesses can subscribe to the ad management service with no upfront costs or minimum commitments, and the fintech company will automatically deliver relevant ads on their platforms.

Luxury Goods Recovery in France Limits European Stock Losses

European stocks fell Tuesday, weighed down by declines in healthcare and banking sectors, while a recovery led by luxury goods stocks in France limited regional losses following political turmoil on Monday.

The Stoxx 600 index closed down 0.2%, retreating from record highs hit in the previous session.

Spanish stocks also dropped 0.2% after hitting nearly 18-year highs on Friday.

French shares gave up gains to close flat after a sharp sell-off on Monday triggered by the sudden resignation of Prime Minister Sébastien Lecornu.

The outgoing prime minister began last-ditch talks lasting two days to try to form a new government, with analysts warning that political chaos could hinder the 2026 budget adoption.

President Emmanuel Macron faces increasing calls to resign or call early elections amid a crisis that has seen five prime ministers leave office in less than two years.

Multi-asset strategy expert Anthi Tsouvali from UBS Global Wealth Management said, “For financial markets, what really matters is the budget and how things proceed.”

She added, “We are in a situation where we might not have a government for some time, which will lead to a lot of volatility.”

France remains the worst-performing market in Europe this year, up 8%, in stark contrast to double-digit gains elsewhere, reflecting market discomfort with a divided parliament and increasing instability since Macron’s re-election in 2022.

The luxury goods sector jumped 1.8%, renewing investor hope that the sector is poised for a gradual return to its previous recovery thanks to new designers in fashion houses and efforts to ease costs.

Morgan Stanley upgraded luxury giants LVMH and Kering, lifting the former’s shares 3.6% and the latter’s 5.7%.

Healthcare stocks, heavyweights among Europe’s largest companies, fell 0.4%, dragged down by a 2.8% drop in Danish firm Novo Nordisk after a U.S. court rejected its appeal in the Medicare drug price negotiation program.

German company Bayer’s shares fell 2%, with traders citing a Goldman Sachs note predicting third-quarter earnings below estimates.