NEW YORK (AP) — Most U.S. stocks were rising Thursday following the latest announcements. Inflation Update There is growing speculation on Wall Street that a rate cut could come as early as September.
Four of five stocks in the S&P 500 index rose, while Microsoft, Nvidia and others fell. Influential companies That underlying strength was obscured by rallying stock prices, which soared amid enthusiasm for artificial intelligence technology that critics said was too expensive and helped send the S&P 500 down 0.9% from an all-time high hit a day earlier.
The Nasdaq Composite Index also fell 1.8% from its all-time high due to declines in big tech stocks, but the Dow Jones Industrial Average was up 27 points, or 0.1%, as of 12:26 p.m. Eastern time.
Still, the direction was clearly up for most Wall Street stocks, especially the housing companies, property owners and others most likely to benefit from easier interest rates. BXP, which owns Boston’s Prudential Center and other prominent office buildings across the U.S., rose 4.6%, the market’s biggest gainer.
The market continues to rise. Seth Stell of The Associated Press reports.
Smaller companies, which had lagged the market’s giants for some time, also performed well, with the Russell 2000 index of small and mid-cap stocks rising 3%, giving it a decisive lead over the market.
Bond markets were even more volatile, with yields plummeting as traders piled in. The Federal Reserve will soon start cutting interest rates Key interest rates have been hovering at their highest levels in more than 20 years for almost a year now.
Wall Street wants interest rates to fall because lower rates would make borrowing more expensive and ease pressures that have built up in the economy. Buy a housecars and other credit cardBut Fed officials He said They want to see “better data” on inflation before taking action. They are intentionally keeping interest rates high to exert downward pressure. About the economyThey want to put a stop to the worst inflation in generations once and for all.
Wall Street sees just that in a report on Thursday showing that prices of gasoline, cars and other goods bought by U.S. consumers in June rose more slowly than expected.
“In a word, it’s crucial,” said Lindsay Rosner, head of multi-sector investing at Goldman Sachs Asset Management. “There have been three inflation readings between this morning and the September Fed meeting, and today’s reading was crucial in giving the Fed confidence that inflation is still trending in the right direction.”
Treasury yields immediately fell sharply after the report was released. The 10-year Treasury yield fell to 4.18% from 4.28% at Wednesday’s close and 4.70% in April. That’s a big move for the bond market, and it’s set to send stock prices soaring.
The yield on the two-year Treasury note, which more accurately reflects expectations of Fed action, fell to 4.50% from Wednesday’s close of 4.62%.
The decline in yields helped power gains across much of the U.S. stock market, with property owners and utilities leading the way as lower bond yields make their relatively high dividends look more attractive to income-seeking investors.
S&P 500 real estate investment trusts rose 2.6%, by far the biggest gain among the index’s 11 sectors. Utilities stocks rose 1.6%, the second-best performer in the index.
Home builders were also bullish on hopes of lower mortgage rates. Revitalizing the industryPulteGroup Inc. rose 5.8% and D.R. Horton Inc. rose 6.3%, the biggest gains in the S&P 500. Mohawk Industries Inc., which makes residential flooring products, rose 6.1%.
Hopes of upcoming interest rate cuts, plus hopes of strong profit growth in a resilient but slowing economy, have also helped lift the U.S. stock market to record highs. Analysts are expecting S&P 500 companies to post their strongest growth in more than two years this upcoming earnings season, but it’s gotten off to a mixed start.
Delta Airlines The company slid 5.1% after reporting slightly weaker spring revenue and profit than analysts had expected. The company said demand for peak summer travel was strong, but also lowered its profit outlook for the current quarter below Wall Street expectations.
Conagra Brands fell 2.2 percent even though it reported better-than-expected profits for its latest quarter. Revenue from the company, which owns Birds Eye, Duncan Hines and Marie Callenders, fell short of analysts’ expectations. Conagra also missed analysts’ expectations for its next fiscal year’s profit forecast. The food company said customers are still getting used to higher prices.
PepsiCo The company’s shares fell 0.2% despite beating profit expectations in the spring. The company’s latest quarterly revenue was slightly below analysts’ expectations and the company said its underlying earnings measure was likely to fall at the low end of its original forecast range for the full year.
The winner was WD-40, which rose 2.9% after reporting profits and sales that beat analysts’ expectations.
In overseas stock markets, Japan Nikkei Stock Average It rose 0.9%, again hitting a new all-time high.
Indices were also strong across much of the rest of Asia and Europe.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
