New York — U.S. stocks are drifting near record highs on Tuesday as Wall Street looks set for another quiet day of trading.
S&The P 500 was little changed in afternoon trading and hovered near last week’s record. The Dow Jones Industrial Average was up 11 points, or less than 0.1%, as of 12:59 p.m. ET. The Nasdaq Composite Index fell 0.1% a day after hitting an all-time high.
The index rose sharply on expectations that the Federal Reserve will cut interest rates later this year amid hopes that inflation will subside. The market also rose as more reports emerged that large U.S. companies were earning more than expected.
Zoom Video Communications added 0.6% after joining the ranks of companies that delivered stronger profits in their latest quarter than analysts expected.
Lam Research also helped support the market after the semiconductor industry supplier announced a program to buy up to $10 billion of its stock. The company also said it would conduct a 10-for-one stock split, which would lower the price of each share and allow more investors to purchase the shares more cheaply. The stock price rose 2.1%.
This helped offset a 2.6% decline in Palo Alto Networks. The cybersecurity company delivered a better-than-expected earnings report, but the midpoint of its expected revenue range for this quarter was well below analysts’ expectations.
trump media & Technology Group, which runs Donald Trump’s Truth Social network, fell 9.8% after disclosing a net loss of $327.6 million in its first quarterly report as a public company.
Lowe’s fell 2.8% despite reporting better results for its latest quarter than analysts had feared. It said it was maintaining its sales outlook for the year, including up to a 3% decline in its key underlying sales figure as high interest rates curbed customer activity.
Interest rates on mortgages, credit cards and other payments are higher now that the Federal Reserve has kept key interest rates at their highest levels for more than two decades. Through high interest rates, we are trying to walk a tightrope that puts pressure on the economy just enough to curb high inflation, but not enough to cause a painful recession.
An encouraging report released last week shows inflation may finally be heading in the right direction after a disappointing start to the year that raised hopes that such a “soft landing” for the economy could be possible. Expectations have also grown that the Federal Reserve will cut the benchmark interest rate once or twice this year.
Federal Reserve Governor Christopher Waller said in a speech Tuesday that he expects economic data to ease after recent reports on U.S. retail sales and the strength of the U.S. services business came in weaker than expected. This, in turn, will help put downward pressure on inflation.
But he said “we need to see a few more months of good inflation data before we support easing in our monetary policy stance” unless the job market weakens significantly before then.
Expectations of interest rate cuts are pushing Treasury yields lower, which eases pressure on stock markets. The yield on the 10-year Treasury note fell to 4.40% from 4.48% on Monday afternoon. The two-year yield, which more closely tracks expectations of Fed action, fell to 4.82% from 4.85%.
There aren’t many top economic reports this week, and the greatest potential for a sharp move in the market will likely come from the upcoming earnings reports.
This week’s headliner is Nvidia, whose stock price has soared amid enthusiasm for its artificial intelligence technology. It’s scheduled to report its latest quarterly results on Wednesday, and expectations are high.
Target reports to Ross Stores on Thursday and again on Wednesday. They can provide details about how well American households are holding up their spending. Pressure on them is rising amid still high inflation, which appears to be highest for low-income customers.
In overseas stock markets, most indices in Europe and Asia showed declines.
After S, the Hong Kong index fell 2.1% and the Shanghai index fell 0.4%.&P Global Market Intelligence raised its forecast for China’s economic growth rate this year from 4.7% in April to 4.8%, but emphasized that it was not overly optimistic.
The report said, “There is no change in the overall outlook for a lukewarm economic recovery, with economic expansion supported by stronger policy stimulus, stronger external demand, and gradual improvement in private sector confidence.”
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
