Wall Street rises to a record as it waits for the Fed
The Standard & Poor’s 500 index rose to a record Tuesday as Wall Street made some of its final moves before hearing what the Federal Reserve will do with interest rates.
The benchmark index rose 29.09 points, or 0.6%, to 5,178.51 and topped its all-time high set last week. The Dow Jones Industrial Average jumped 320.33 points, or 0.8%, to 39,110.76, and the Nasdaq composite gained 63.34 points, or 0.4%, to 16,166.79.
All three indexes erased losses from earlier in the day to climb.
International Paper rose 11% for the biggest gain in the S&P 500 after it named Andrew Silvernail, an executive at investment company KKR, as its new chief executive.
Shares of Unilever that trade in the United States added 2.8% after it said it was spinning off Ben & Jerry’s and its ice cream business, while cutting 7,500 jobs.
Nvidia swung through the day and went from one of the heaviest weights on the market to one of its strongest propellants. Its massive size gives it outsized sway on indexes, and it went from a loss of nearly 4% to a gain of 1.1%.
It unveiled new products at its developers conference a day earlier, which analysts said should keep Nvidia ahead of competitors. Its stock has more than tripled over the last 12 months because of the frenzy around artificial intelligence technology.
On the losing end of Wall Street was Super Micro Computer, whose stock had earlier zoomed from less than $100 to more than $1,000 in a year. The seller of server and storage systems used in AI and other computing sank 9% after it said it’s looking to sell 2 million shares of its stock.
Elsewhere on Wall Street, the focus was on the Fed.
The central bank began its latest meeting on interest rates and will announce its decision Wednesday. The widespread expectation is for it to leave its main interest rate alone at a two-decade high. The hope is that it will indicate it still expects to cut rates three times this year, as it hinted a few months ago.
Part of the run for U.S. stocks to records has been because of hopes for such cuts, which would relieve pressure on the economy and financial system. But recent reports on inflation have consistently been coming in worse than expected. That could force the Fed to say it will deliver fewer rate cuts this year, and traders have given up earlier expectations that the year’s first cut would arrive Wednesday.
Strategists at Bank of America expect Fed officials to stick with forecasts showing a possibility of three cuts in 2024. But it’s a close call, and “risks skew to fewer cuts signaled,” according to the strategists led by Mark Cabana.
Treasury yields eased in the bond market ahead of the announcement. The yield on the 10-year Treasury slipped to 4.29% from 4.33% late Monday.
High yields and interest rates can hurt prices for stocks broadly, while also sucking dollars and enthusiasm out of excited parts of the market.
Bitcoin’s price generally has been sliding since hitting a peak above $73,000 last week. It’s notorious for taking investors through severe swings in price. It fell further Tuesday to less than $63,900.
In stock markets abroad, Japan’s Nikkei 225 rose 0.7% after the Bank of Japan hiked its benchmark interest rate for the first time in 17 years. In a historic move, it moved the rate back to a range of zero to 0.1% and made other changes, ending a long experiment of rates below zero meant to boost the economy and inflation.
The era-defining move was widely expected and still keeps interest-rate policies easy, analysts said.
Stocks fell 1.2% in Hong Kong and 0.7% in Shanghai after troubled property developer China Evergrande Group said Beijing’s market watchdog fined it $333.4 million, accusing it of falsifying its revenue, among other violations.
Stocks were mixed elsewhere in Asia and Europe.
Choe writes for the Associated Press. AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this report.
