NEW YORK (AP) — U.S. stocks continued to hover near record highs after a quiet day on Wall Street on Tuesday.
The S&P 500 was little changed in morning trading, just below the all-time high it hit two weeks ago. The Dow Jones Industrial Average was down 29 points, or 0.1%, as of 10:25 a.m. Eastern time, and the Nasdaq Composite was down less than 0.1% from the record it hit a day earlier.
Electric-car maker Tesla Inc. led the market with an 8.6% rise in its shares after the company reported a smaller drop in spring sales than analysts had expected. But losses in some big, influential stocks offset the surge. Nvidia, which has become a symbol of the company’s rapid entry into artificial intelligence technology, fell 2.1%, the heaviest drag on the S&P 500 index. Eli Lilly fell 3.2%.
In the bond market, Treasury yields fell as investors took the Federal Reserve chairman’s comments as a signal that interest rates could be cut this year. Fed Chairman Jerome Powell, whose comments are always scrutinized for hints about interest rates, acknowledged that inflation figures have improved after disappointingly high readings at the start of the year.
“We just want to understand that the levels we’re looking at are the true value of underlying inflation,” he said.
Wall Street is hoping that inflation will slow and the Fed will cut its key interest rate, which is at its highest in more than two decades and putting a brake on the economy. That expectation has strengthened, sending Treasury yields lower since April.
But Tuesday’s report may have disappointed those expectations, showing that U.S. employers added more jobs at the end of May than economists had expected and slightly surpassed April’s total. While the high number of jobs is good news for workers, there are fears on Wall Street that a strong labor market could put upward pressure on inflation and delay interest rate cuts.
Treasury yields, which fell after Powell’s comments, pared losses following the jobs report. The 10-year Treasury yield rose to 4.44% from Monday’s close of 4.46%.
Treasury yields have also come under upward pressure recently due to politics. Last week’s debate between President Joe Biden and former President Donald Trump prompted traders to make moves in anticipation of a possible Republican sweep in November. This included a rise in Treasury yields due in part to the possibility that the Trump administration would pursue policies that would further increase the U.S. government’s debt.
The yield on the 10-year Treasury note is still well above the 4.29% level late Thursday before the debate.
In commodities, a barrel of benchmark U.S. crude rose 0.1% after hitting its highest since April, while the international standard Brent crude rose 0.3%.
Oil prices are rising on hopes of stronger summer demand and the possibility of a hurricane damaging oil production in the Gulf of Mexico. Hurricane Beryl is forecast to move faster than expected and approach Jamaica and the Cayman Islands.
Overseas, European indexes fell after reports that European inflation remained above the European Central Bank’s expectations. Germany’s DAX index fell 0.9% and France’s CAC 40 index fell 0.4%.
French stocks had risen a day earlier after election results suggested the far-right parties would fail to win a majority in the country’s parliament, increasing the chances of government gridlock and avoiding a worst-case scenario in which a far-right majority would push through policies that would dramatically increase France’s debt.
This is a crucial year for elections around the world, with voters in the UK heading to the polls later this week.
In Asia, the Nikkei rose 1.1 percent after the Japanese yen fell again to near its lowest level in 38 years, potentially boosting profits for Japanese exporters.
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AP writers Matt Ott and Jimmo Zhong contributed.
