NEW YORK (AP) — U.S. stocks hovered near record levels Tuesday as Wall Street appears headed for another quiet trading day.
The S&P 500 was down 0.1% at the start of trading, just below the all-time high hit last week. The Dow Jones Industrial Average was down 3 points, or less than 0.1%, as of 9:40 a.m. ET, and the Nasdaq Composite Index was down 0.3% after hitting a record high.
The index rose to a record level, largely due to expectations that the Federal Reserve will cut interest rates this year amid hopes that inflation will subside. The market was also boosted by an increasing number of reports showing that major U.S. companies were making better-than-expected profits.
Palo Alto Networks joined them, with its latest quarterly profit beating analysts’ expectations. But the cybersecurity company also gave a range of expected earnings for the current quarter, with the midpoint slightly below analysts’ expectations, and the company’s stock fell 6.2%.
Lowe’s also fell 2.6% after reporting better quarterly results than analysts had feared. It said it was maintaining its sales forecast for this year, including a decline of up to 3% in key underlying sales as high interest rates constrain customer activity.
Trump Media & Technology Group, which operates Donald Trump’s Truth social network, fell 2.8% after the company disclosed a $327.6 million net loss in its first quarterly report as a publicly traded company.
Those helped offset a 3% rise in Macy’s, which reported stronger results than analysts expected in its latest quarter. The company, which also operates Bloomingdale’s stores, raised its forecasts for future sales and profits.
Interest rates on mortgages, credit cards and other payments are rising as the Federal Reserve keeps key interest rates at the highest levels in more than 20 years. The government is trying to walk the tightrope of squeezing the economy through high interest rates high enough to quell high inflation, but not so high as to cause a painful recession.
After a gloomy start to the year, an encouraging report released last week showing that inflation may finally be heading back in the right direction has raised hopes that such a “soft landing” for the economy may be possible. Ta. There were also growing expectations that the US Federal Reserve (Fed) would cut its key interest rates once or twice this year.
Those expectations pushed Treasury yields lower, easing pressure on the stock market. The yield on the 10-year U.S. Treasury note fell to 4.40% from 4.48% late Monday. The two-year bond yield, which more accurately reflects expectations for Fed policy, fell to 4.82% from 4.85%.
There haven’t been many strong economic reports this week, and the biggest potential for a market rally will be upcoming earnings reports.
This week’s headliner is likely Nvidia, whose stock has soared amid the frenzy surrounding its artificial intelligence technology. The company is scheduled to release its latest quarterly results on Wednesday, and expectations are high.
Target also reported Ross Stores on Wednesday following Thursday. They could provide more information about how well U.S. household spending is holding up. With inflation still high, albeit not as high as before, pressures on customers are increasing, and rifts appear to be glaring among the lowest-income customers.
In overseas stock markets, stock indexes fell in many regions of Europe and Asia.
Stocks fell 2.1% in Hong Kong and 0.4% in Shanghai after S&P Global Market Intelligence raised its forecast for China’s economic growth rate this year to 4.8% from 4.7% in April. , emphasized that he was not overly optimistic.
“The overall outlook for a gradual economic recovery remains unchanged, with the economy expanding supported by stronger policy stimulus, stronger external demand and gradually improving private sector confidence,” the report said. .
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AP Business writers Yuri Kageyama and Matt Ott contributed.
