NEW YORK (AP) — U.S. stocks are mixed in a quiet session on Monday, ahead of a week that will see several top-line reports on inflation as well as the Federal Reserve's latest meeting on interest rates.
The S&P 500 was down 0.1% in morning trading, still close to its record set last week. The Dow Jones Industrial Average was up 7 points, or less than 0.1%, as of 10:20 a.m. ET, and the Nasdaq composite was down 0.2%.
Huntington Bancshares fell 5.9%, one of the market's biggest losses after cutting its forecast for a key component of this year's earnings. Other banks also fell afterward, including losses of 3.1% for Citizens Financial Group, 3% for Regions Financial and 2.7% for KeyCorp.
Diamond Offshore Drilling rose 10.4% after Noble agreed to buy its rival in a cash and stock deal valued at about $1.6 billion. Noble added 4.7% in a sign that traders expect the combination to be a winner.
Apple fell 0.9% ahead of a conference where analysts expect it to offer details about its advances in artificial intelligence technology. The furor around AI on Wall Street has helped stocks hit record highs despite concerns about high interest rates and the slowdown in the U.S. economy that they induce.
Data on the economy has been mixed recently and traders hope it will ultimately show a slowdown of just the right magnitude. A cooldown would put less upward pressure on inflation, which could encourage the Federal Reserve to cut its main interest rate from its most severe level in more than two decades.
But the data has been difficult to parse, as Friday's better-than-expected jobs report quickly followed weaker-than-expected reports on U.S. manufacturing and other areas of the economy. Even within American consumer spending, which is the heart of the American economy, there is a stark divide between low-income households struggling to keep up with still-high inflation and higher-income households that are faring better.
"Simply put, the data remains mixed, leaving all major macroeconomic outcomes still on the table for this year," according to Morgan Stanley strategists led by Michael Wilson.
Meanwhile, companies benefiting from the AI boom continue to see strong growth almost regardless of what the economy and interest rates are doing. Nvidia, for example, is still worth almost $3 trillion after falling 1.7% on Monday. It's the first day of trading for the company after undergoing a 10-for-one stock split to make its share price more affordable for more investors, after it soared to over $1,000 amid the frenzy. of AI.
Treasury yields in the bond market were mixed ahead of late-week reports that will show whether inflation improved last month at both the consumer and wholesale levels.
A report is coming out at the end of the week that will show how much inflation American households are preparing for in the future. The Federal Reserve is closely monitoring the move, hoping to avoid a vicious cycle in which high inflation expectations lead to behavior that causes even worse inflation.
On Wednesday, the Federal Reserve will announce its latest interest rate decision. Virtually no one expects their prime interest rate to change at that time. But policymakers will release their latest forecasts on where they see interest rates and the economy going in the future.
The last time Fed officials released such projections, in March, they indicated that the typical member still expected about three interest rate cuts in 2024. That projection will almost certainly fall this time. Wall Street traders are largely betting on just one or two rate cuts in 2024, according to CME Group data.
In the bond market, the 10-year Treasury yield rose to 4.45% from 4.43% late Friday. The two-year yield, which more closely tracks the Federal Reserve's expectations, fell to 4.87% from 4.89%.
In foreign stock markets, France's CAC 40 index sank 1.9% after French President Emmanuel Macron dissolved the National Assembly following the surprise European Parliament election results. Far-right parties made significant gains and the value of the euro fell. Other indices in Europe also fell, although not as much as France's.
Markets in Asia finished mixed. Tokyo's Nikkei 225 index rose 0.9% after government data showed Japan's economy shrank less in the first three months of the year than previously thought. South Korea's Kospi fell 0.8%, while markets were closed in Shanghai, Hong Kong and Australia for holidays.
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AP writers Matt Ott and Zimo Zhong contributed.
