FILE – People walk past the New York Stock Exchange on March 27, 2024. Global stocks are rising on Monday, April 29, 2024, with Wall Street optimistic about a bull market ending the week, even as all eyes are on the Federal Reserve’s policy meeting. It’s set for later this week. (AP Photo/Peter Morgan, File)
NEW YORK (AP) — U.S. stocks were volatile Monday as Wall Street geared up for a week packed with potentially market-moving reports.
The S&P 500 rose 0.3% in intraday trading, its best week since November. As of 11 a.m. ET, the Dow Jones Industrial Average was up 75 points, or 0.2%, and the Nasdaq Composite was up 0.3%.
This week, about a third of S&P 500 companies will report on how much profit they made in the first three months of the year. This includes major companies like Amazon and Apple. Reports have generally been better than expected so far, with about half of the S&P 500’s reports coming from the likes of Alphabet and Microsoft in the last week.
Domino’s Pizza joined that pile on Monday, reporting better-than-expected results as delivery and carryout orders rose for the second straight quarter. The stock rose 4.2%.
Tesla was also a big force pushing the market up, rising 12.3%. The company’s CEO, Elon Musk, met with senior Chinese officials as the company seeks to boost sales in the world’s largest auto market.
These helped offset SoFi Technologies’ 10.2% decline. The financial services company reported strong results in its latest quarter that beat analysts’ expectations, but net profit expectations for the current quarter fell short.
Following last week’s strong earnings report, the S&P 500 rose to its first winning week in four years. Companies in the index collectively appear on track to report 3.5% year-over-year growth in earnings per share, according to FactSet.
It will take this much strength for the stock market to stabilize after a rough April. The S&P 500 fell as much as 5.5% during the month as signs that inflation remained high led traders to inch back their expectations for when the Federal Reserve would start cutting interest rates.
Traders entered the year expecting at least six rate cuts, but are now betting heavily on just one, according to data from CME Group.
When the Federal Reserve announces its latest policy decision on Wednesday, no one expects it to change its key interest rate, which is at its highest level since 2001. Rather, the hope is that the central bank will provide some clues as to when the first policy decision will be made. There is a possibility that interest rates will be cut.
This week’s Fed meeting will not include any release by Fed officials of their predictions about where they expect interest rates to go in the coming years. The last set of forecasts released in March showed that typical Fed officials at the time were planning three rate cuts into 2024.
But Federal Reserve Chairman Jerome Powell may offer more color in his press conference after the central bank’s decision. He said earlier this month that interest rates could remain high for an extended period of time as the Fed waits for further evidence that inflation is falling sustainably toward its 2% target. he suggested.
A major report that hit Wall Street on Friday could further change the outlook for policymakers. Economists expect Friday’s jobs report to show that U.S. employers’ hiring cooled in April and that wage growth for workers remained relatively stable.
Wall Street is in an awkward position, with the job market expected to remain strong enough to avoid a recession, but not strong enough to cause upward pressure on inflation.
Economists at BNP Paribas recently boosted their expectations for the timing of the Fed’s first interest rate cut, as inflation was higher than expected and the economy remains very resilient.
They had expected a rate cut in July, but said a delay to September could bring it uncomfortably close to the US presidential election in November. So they are now calling on the Fed to make its first rate cut in December.
The Fed not only wants to avoid the appearance of trying to influence the election outcome, but also wants to avoid the appearance that the Fed is trying to influence the outcome of the election, the November election will be a critical policy moment that will affect the course of the economy and inflation, according to the BNP Paribas team led by Andy Schneider. may result in major changes.
“Even if the economy progresses enough to justify a rate cut by September, these risks are likely to outweigh the marginal economic benefits that could come from doing so,” the official said just before the election. “I think so,” he said.
Much of the record rally in U.S. stocks since late October was built on expectations for future interest rate cuts, which would ease pressure on the economy and typically boost the prices of investments. If these do not materialize, the stock market may come under further downward pressure.
In overseas markets, the Japanese stock market was closed due to the holiday. However, the Japanese yen continues to fluctuate significantly. The yen has fallen to 1990 levels against the US dollar. The sharp decline has fueled speculation that Japanese authorities may move to support the yen. The Bank of Japan left its key interest rate unchanged on Friday.
Elsewhere, stock indexes rose across much of Asia, while Europe remained mixed.
In the bond market, the yield on the 10-year U.S. Treasury note fell to 4.61% from 4.67% late Friday.
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AP Business Writer Yuri Kageyama contributed.
