NEW YORK (AP) โ Wall Street is rising and near record highs amid hopes that Tuesday's moves The central bank of Japan Keeping interest rates low for investors could be a boon for the rest of the world.
The S&P 500 rose 0.4% in midday trading, just 0.8% off its record set nearly two years ago. The Dow Jones Industrial Average rose 182 points, or 0.5%, after reaching its own all-time high. The Nasdaq Composite rose 0.4% as of 11 a.m. ET.
Enphase Energy jumped 6.7% after the maker of microinverters for the solar energy industry told employees it will cut 10% of its global workforce and make other streamlining changes. Shares of oil and gas companies also helped lift the market after crude oil prices rose about 1.5% to recoup some of their sharp declines in recent months.
Overseas stock markets were mixed and trading was mostly quiet. Japan was an exception, with the Nikkei 225 rising 1.4% after the country's central bank decided to keep its benchmark interest rate below zero in hopes of encouraging more borrowing and spending.
The S&P 500 is up about 15% since late October on hopes that Wall Street can take a similar approach. With inflation below its peak two summers ago and the economy still growing, the growing expectation is that the Federal Reserve in 2024 he will back away from his campaign to dramatically increase interest rates.
Fed Chair Jerome Powell appeared to give a thumbs up to such hopes last week when he did not push hard against traders' expectations of several rate cuts next year. Wall Street loves lower rates because they give a boost to investment prices and ease pressure on the economy and financial system.
The hope is that the Federal Reserve can accomplish what was considered a nearly impossible tightrope walk by first controlling inflation through high interest rates and then cutting them before they push the economy into a recession.
A report Tuesday morning showed that the real estate industry appears to be in better shape than expected. Homebuilders broke ground on many more new homes in November than expected, 200,000 more at a seasonally adjusted annualized rate.
Of course, Wall Street's big moves also have critics saying the rally looks overblown and that stocks now look too expensive relative to the profits companies are making. More cautious investors also say the number of rate cuts traders are projecting for 2024 seems unlikely unless the U.S. economy falls into a recession.
Some Fed officials have been more cautious about the prospect of rate cuts since Powell's comments last week. On Friday, for example, the president of the Federal Reserve Bank of New York said it was โpremature to even thinkโ about cutting rates in March.
However, markets have been euphoric, and the S&P 500 is coming off its seventh consecutive week of gains, its longest streak in six years.
In a sign of how voracious buyers have become, Bank of America clients last week invested $6.4 billion more in U.S. stocks than they withdrew. It's the fourth-largest weekly entry since it began tracking the data in 2008, strategist Jill Carey Hall said in a BofA Global Research report.
In the bond market, the 10-year Treasury yield fell to 3.90% from 3.94% late Monday. In October it was above 5%, its highest level since 2007 and put tremendous downward pressure on the stock market.
Elsewhere on Wall Street, shares of Tylenol maker Kenvue rose 5% following a favorable ruling in federal court. The company wanted to exclude expert opinions in a multi-jurisdictional court against it on whether in utero exposure to acetaminophen, the pain reliever used in Tylenol and other generic drugs, could cause autism or attention deficit disorder.
Judge Denise Cote of the United States District Court for the Southern District of New York agreed with Kenvue and ruled Monday that the testimony was inadmissible.
Alphabet added 0.6% after its The Google company resolved the accusations which stifled competition against its Android app store, agreeing to $700 million and making several concessions.
Accenture swung between losses and modest profits after reporting stronger results than analysts expected for the latest quarter but also giving a weaker-than-expected revenue forecast. It recently fell 0.1%.
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AP Business writers Matt Ott and Elaine Kurtenbach contributed.
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