NEW YORK (AP) — U.S. stocks were climbing toward record highs on Monday as momentum on Wall Street continued to drive stock prices higher.
The S&P 500 was up 0.6% in morning trading and on track to surpass the all-time high it hit on Wednesday, having risen for 10 of the past 12 weeks on growing hopes that inflation is slowing and the Federal Reserve will soon cut interest rates.
The Dow Jones Industrial Average was up 180 points, or 0.5%, as of 10:40 a.m. Eastern time and also on pace to hit a new record high, while the Nasdaq Composite Index was up 1%.
Some of the market’s best performers were those who saw former President Donald Trump’s reelection chances increase. Trump Media & Technology Group, which runs Trump’s Truth social platform, surged 32.1%. Bitcoin rose above $62,000 again after Trump, a self-described crypto-friendly candidate, survived an assassination attempt over the weekend.
Isaac Boltanski, director of policy research at BTIG, said Trump could quickly see a rise in the polls, much like President Ronald Reagan did in 1981, and “his defiant attitude after the attacks could become the defining image of this election cycle.”
Yields on longer-term Treasury notes also rose more than shorter-term ones, with the 10-year Treasury yield rising to 4.22% from 4.19% late on Friday.A similar scene unfolded after last month’s debate between President Trump and President Joe Biden, as traders bet on a Republican victory in November that could ultimately lead to policies that would further increase the U.S. government’s debt.
Shares of major financial companies that could benefit from deregulation by the Republican administration were mixed after their latest earnings reports.
Investment bank Goldman Sachs rose 0.7 percent after reporting profit and revenue for its latest quarter that beat analysts’ expectations. Asset manager BlackRock, which runs the iShares exchange-traded fund, fell 0.5 percent after profit beat expectations but revenue fell slightly below.
Expectations are generally high heading into the current quarter’s earnings season, which unofficially began last week. Analysts are forecasting 9.3% year-over-year growth for S&P 500 companies, according to FactSet, which would be the strongest growth in more than two years.
Such forecasts have been one of the driving forces behind U.S. stocks hitting record highs, along with upbeat reports on inflation, which are showing signs of slowing enough that most on Wall Street expects the Federal Reserve to start cutting its key interest rate in September.
For about a year, the Fed has kept its key interest rate at its highest level in more than two decades. Lowering rates would ease pressures that have built up in the economy from the high cost of borrowing on credit cards to buy homes, cars and everything else. But Fed officials have said they want to see “better data” on inflation before acting.
Federal Reserve Chairman Jerome Powell is scheduled to speak at the Economic Club of Washington later Monday afternoon.
The US stock market rally seems unstoppable, but skeptics remain cautious, saying prices are too high. The S&P 500 is up 18.5% this year and has set 37 new all-time highs.
Stifel chief equity strategist Barry Bannister acknowledged that he had predicted at least a stock price “correction” was imminent earlier this year, but he still warned of the possibility of a 10% drop down the road.
Bannister said high inflation is likely to persist and that he expects the U.S. economy to grow slower than expected in the second half of the year. Such a situation would constitute “moderate stagflation,” he said, and would particularly hurt Wall Street’s biggest stars: high-growth stocks.
On Wall Street, U.S.-listed shares of British luxury fashion house Burberry fell 16.3% after the company said it had appointed Joshua Shulman, the former head of Michael Kors and Coach, as its new chief executive officer. Mr. Shulman, 52, will succeed Jonathan Aykroyd.
The unexpected announcement came shortly after Burberry said its first-quarter profits fell 21% and that it was suspending its dividend.
Macy’s Inc. tumbled 13.9% after months of talks with two investment firms, who said the latest proposal was weak and may not be fully funded.
International stock markets were mixed after China reported weaker-than-expected economic growth in the latest quarter and the Communist Party held its once-in-a-decade policy meeting. Hong Kong’s Hang Seng Index fell 1.5%, while Shanghai’s rose 0.1%.
Stock indexes were mostly lower in Europe.
___
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
