STOCK MARKET TODAY: Wall Street holds steady ahead of this week’s Fed meeting

NEW YORK (AP) — U.S. stocks were mixed in quiet trading Monday a week ago with several high-level reports on inflation, as well as the Federal Reserve’s latest meeting on interest rates.

The Standard & Poor’s 500 index rose 0.1% in afternoon trading, near the record it set last week. The Dow Jones Industrial Average was down 50 points, or 0.1%, as of 1:04 PM ET, and the Nasdaq Composite was up 0.3%.

Southwest Airlines It flew to one of the biggest gains in the market, up 7.8%, after Elliott Investment Management said it had taken a $1.9 billion ownership stake in the company and is pushing for new leadership to modernize the carrier’s software, strategy and operations.

Diamond Offshore Drilling shares jumped 10.5% after Noble agreed to buy its competitor in a cash and stock deal valued at about $1.6 billion. Noble added 5.4%, a sign that traders expect the group to be a winner. Other energy producer stocks also rose as crude oil prices recovered from some of their steep losses since the spring.

Shares of Huntington Bancshares fell to one of the biggest losses on the market after cutting its forecast for a key component of earnings this year. Its stock fell 5.3% and helped drag down other banks, including losses of 2.3% for Regions Financial and 2% for KeyCorp.

Apple drifted 0.3% before that A conference where analysts are expected to provide details About its moves towards artificial intelligence technology. The widespread buzz around artificial intelligence on Wall Street has helped lift stocks to record highs despite concerns about rising interest rates and the slowdown in the US economy they are causing.

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Economic data has been mixed lately, and traders are hoping it will eventually show a slowdown that falls short of a recession and is appropriate in magnitude. A slowdown would put less upward pressure on inflation, which could encourage the Fed to cut its key interest rate from its most punitive level in more than two decades.

But the data was difficult to parse, as the stronger-than-expected jobs report on Friday came quickly on the heels of weaker-than-expected reports on US manufacturing and other areas of the economy. Even within US consumer spending, which constitutes the heart of the US economy, there is a sharp gap between them Low-income families It is struggling to keep up with inflation, which remains high, and high-income households are doing much better.

“The bottom line is, the data remains mixed, leaving all the key macro results still on the table for the year,” according to Morgan Stanley strategists led by Michael Wilson.

Meanwhile, companies benefiting from the AI ​​boom continue to record significant growth almost regardless of what the economy and interest rates do.

NvidiaFor example, it is worth about $3 trillion and rose 1.7% on Monday after reversing an earlier loss. It’s the first day of trading for the company after it underwent a 10-for-1 stock split to make its stock price accessible to more investors, after it swelled to more than $1,000 amid the artificial intelligence craze.

Treasury yields in the bond market were mixed ahead of reports later in the week that will show whether inflation improved last month at the consumer and wholesale levels.

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At the end of the week, a report will come showing the extent of inflation that American families expect in the future. The Fed is watching this measure closely, hoping to avoid a vicious cycle in which higher inflation expectations lead to behavior that leads to worse inflation.

The Federal Reserve is scheduled to announce its latest decision on interest rates on Wednesday. Virtually no one expects the key interest rate to move next. But policymakers will publish their latest forecasts on where they see interest rates and the economy heading in the future.

The last time Fed officials published such forecasts, in March, they noted that the average member still expects roughly three rate cuts in 2024. That expectation will almost certainly be lower this time. Wall Street traders are largely betting on only one or two rate cuts in 2024, according to data from CME Group.

In the bond market, the yield on the 10-year Treasury note rose to 4.48% from 4.43% late Friday. The two-year yield, which more closely tracks the Fed’s expectations, fell to 4.87% from 4.89%.

In stock markets abroad, the French CAC 40 index fell by 1.4% after the trading of French President Emmanuel Macron. Dissolution of the National Council After the surprising results of the European Parliament elections. Far-right parties made gains, and the value of the euro fell. Other indices in Europe also fell, but not as much as French indices.

Markets in Asia finished mixed. The Nikkei 225 index in Tokyo rose 0.9% after government data showed Japan’s economy It contracted less in the first three months of the year than previously thought. South Korea’s Kospi fell 0.8%, while markets in Shanghai, Hong Kong and Australia were closed for the holidays.

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AP writers Matt Ott and Zimo Chung contributed.

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