NEW YORK — (AP) — Wall Street's record-breaking rally continued Wednesday after a... weak reports on the US economy left the door open to possible interest rate cuts.
The S&P 500 rose 0.5%, hitting a record high for the second straight day and the 33rd time this year. The Dow Jones Industrial Average fell 23 points, or 0.1%, while the Nasdaq Composite added 0.9% to its record set the previous day. Trading ended early in the session, ahead of the July 4 holiday.
Tesla helped boost the market again, rising 6.5% a day later reporting a milder drop in sales for the spring than analysts feared. It was one of the strongest forces driving the S&P 500 higher, along with NvidiaWall Street's darling rush towards artificial intelligence technology rose 4.6% to bring the chip company's year-to-date gain to 159%.
Action was strongest in the bond market, where Treasury yields fell following a series of reports that turned out weaker than expected on both the labor market and U.S. service companies. The data could keep investors on the upside. Federal Reserve on track to implement the interest rate cuts Wall Street wants later this year.
A report showed that business activity in the U.S. housing, retail and other services sectors contracted in June for the third time in 49 months. The figure was weaker than economists had expected growth to slow. Perhaps more importantly for Wall Street, the Institute for Supply Management's report also indicated that prices were rising at a slower pace.
That followed morning reports showing a slowdown in the labor market. One said slightly more U.S. workers filed for unemployment benefits last week than economists expected, though the figure is still low compared with history. Another from ADP indicated that employers outside the government slowed their hiring last month, when economists had forecast an acceleration.
The hope on Wall Street is that the economy will slow just enough to keep the economy under control. Upward pressure on inflationbut not enough to cause workers to lose their jobs and trigger a recession. A much-anticipated report will come on Friday, when the U.S. government will give its full update on how many workers employers added to their payrolls in June.
The yield on the 10-year Treasury note fell to 4.35% from 4.44% on Tuesday evening, a notable move for the bond market, with much of the decline coming after the report on U.S. utilities. It has generally been falling since April on hopes that inflation is slowing enough for the Federal Reserve to cut its main interest rate from the highest level in more than two decades.
Wednesday's move erased some of the recent rally in yields. Last week's debate between President Joe Biden and former President Donald Trump pushed some traders to make moves in anticipation of a Republican landslide victory. in November, which would increase the Possibility of tax cuts and other policies This could cause the US government's debt to increase.
The yield on two-year Treasuries, which most closely tracks expectations for Fed action, fell to 4.70% from 4.75% at Tuesday's close. Traders are now betting on a nearly three-in-four chance that the Fed will cut its main interest rate as early as September, according to data from CME Group.
On Wall Street, Constellation Brands fell 3.3% after swinging between gains and losses during the day. The company that makes Modelo beer and Robert Mondavi wines reported higher-than-expected profit for the last quarter, but its revenue was just below the forecasts of financial analysts.
Overall, the S&P 500 rose 28.01 points to 5,537.02, the Dow Jones fell 23.85 points to 39,308.00 and the Nasdaq Composite gained 159.54 points to 18,188.30.
According to Mark Hackett, head of investment research at Nationwide, this is a traditionally good time for Wall Street. Hackett said the first half of July has been the best two-week period for stocks on the calendar since 1928, and the S&P 500 has risen in July for nine consecutive years.
Although Discouraging reports have shown Low-income American households are struggling To keep pace with still-high inflation, "investors' glass-half-full mentality continues to drive markets higher," Hackett said.
In overseas stock markets, indexes rose across much of Europe and Asia. France's CAC 40 rose 1.2% to recoup more of its losses caused by concerns that a shift away from centrist government policies It could lead to further indebtedness for the French government..
The FTSE 100 rose 0.6% in London before a Upcoming UK electionswhile the Nikkei 225 in Tokyo rose 1.3%.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
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