NEW YORK (AP) — Stocks are ticking higher Wednesday as Wall Street waits for a highly anticipated speech about interest rates scheduled for the end of the week.
The S&P 500 was 0.6% higher in midday trading, with most of the stocks in the index climbing modestly. The Dow Jones Industrial Average was up 155 points, or 0.5%, at 33,065, as of 12:08 p.m. Eastern time, and the Nasdaq composite was 0.9% higher. All three indexes shook off small losses from earlier in the morning.
It’s setting up to be a second straight day of relatively modest moves for the market, but they follow some severe swings up and down over the prior weeks.
Stocks drove higher through the summer on hopes that inflation was near its peak and the Federal Reserve may hike interest rates by less aggressive margins than earlier feared. But recent comments by Fed officials have cooled such expectations, while discouraging reports on the economy have piled up to highlight the risk of a recession.
That’s why Wall Street’s focus is centered on Friday, when Fed Chair Jerome Powell is scheduled to give a speech at an annual economic symposium in Jackson Hole, Wyoming. It’s been the setting for major market-moving speeches in the past, and investors are hoping for more clarity on which way the Fed is leaning on future rate hikes.
Higher interest rates slow the economy in hopes of undercutting inflation. But they also risk choking off the economy if done too aggressively, and they pull down on prices for all kinds of investments.
Also scheduled for Friday is the latest reading on the Federal Reserve’s preferred method of measuring inflation.
Treasury yields have been rising recently, partly on anticipation that the Fed will continue to lean toward raising rates aggressively to quash the worst inflation in decades. The two-year yield, which tends to track expectations for the Fed, rose to 3.37% from 3.30% late Tuesday.
The 10-year yield, which helps set rates for mortgages and many kinds of loans, rose to 3.11% from 3.05% after a report showed that U.S. orders for long-lasting goods were flat in July. After ignoring transportation, though, growth was stronger than economists expected.
In the stock market, Tesla rose 1.8%, and its immense size means it was one of the strongest forces lifting the S&P 500. The electric vehicle maker's stock is set to split at the end of the trading day, giving investors three Tesla shares for every one they held a week ago. Such splits cause the price of a share to drop, while the company's overall value remains the same. That can make a stock easier for smaller-pocketed investors to afford.
Intuit, the company behind TurboTax. rallied 5.7% for one of the larger gains in the index. It delivered stronger results for the latest quarter than expected and a forecast for revenue this upcoming fiscal year that topped some analysts’ expectations.
On the losing end were several retailers, which are among the last companies to report how much profit they made during the spring.
Nordstrom sank 18.5% after it cut its financial forecast for the year, though it reported stronger profit for the latest quarter than expected. It’s the latest major retailer to say it’s struggling to keep up with its customers' changing shopping patterns.
Not only are customers shifting their spending away from stores and toward travel and other experiences, the ones still coming in are seeing their buying power undercut by high inflation. That has the industry facing growing mountains of unsold inventory, with pressure hitting lower-income customers in particular.
Advance Auto Parts slumped 9.8% after its quarterly results fell short of expectations. The auto parts retailer said its do-it-yourself customers are getting squeezed by high inflation and gasoline prices well above where they were a year ago.
Markets overseas were mixed, with stocks in Shanghai sinking 1.9% but South Korean stocks up 0.5%.
Crude oil prices were bouncing between gains and losses after climbing earlier in the week.
AP Business Writer Yuri Kageyama contributed.
Stan Choe, The Associated Press