NEW YORK (`) — The S&P 500 rose to a record high on Tuesday as Wall Street made some of its final moves before learning what the Federal Reserve will do with interest rates.
The benchmark index rose 29.09 points, or 0.6%, to 5,178.51, surpassing its all-time high set last week. The Dow Jones Industrial Average rose 320.33, or 0.8%, to 39,110.76, and the Nasdaq Composite gained 63.34, or 0.4%, to 16,166.79.
All three indices made up for the previous day's losses and rose.
International Paper posted the biggest gain in the S&P 500, rising 11%, after the company named Andrew Silvernail, an executive at investment firm KKR, as its new CEO.
U.S.-traded shares of Unilever rose 2.8% after it announced it was spinning off Ben & Jerry's and its ice cream business, cutting 7,500 jobs in the process.
Nvidia has survived the day, going from one of the heaviest weights on the market to one of its strongest fuels. Due to its massive size, it has an outsized impact on the indices, rising from nearly 4% to a 1.1% gain.
A day earlier, the company presented new products at its developer conference that analysts said should keep Nvidia one step ahead of the competition. The company's share price had already more than tripled in the last 12 months due to the hype surrounding artificial intelligence technology.
On the losing side of Wall Street was Super Micro Computer, whose shares had previously risen from less than $100 to over $1,000 in a year. The seller of server and storage systems for AI and other computing fell 9% after it said it would sell 2 million shares of its stock.
Elsewhere on Wall Street, the focus was on the Federal Reserve.
The Fed has begun its latest interest rate meeting and will announce its decision on Wednesday. The widespread expectation is that the key interest rate will remain at a two-decade high. The hope is that she will indicate that she still expects to cut rates three times later this year, as she indicated a few months ago.
Part of the record rise in U.S. stocks was due to hopes of such cuts, which would ease pressure on the economy and financial system. But the latest inflation reports have consistently been worse than expected. That could force the Fed to say it will make fewer rate cuts this year, and traders have already abandoned earlier expectations that the first rate cut of the year would come on Wednesday.
Bank of America strategists expect Fed officials to stick with their forecasts, which show the middle member still expects three rate cuts in 2024. But it's a close call, and “the risk is that fewer cuts will be signaled,” said strategists led by Mark Cabana.
Treasury yields in the bond market fell ahead of the announcement. The yield on the 10-year Treasury note fell to 4.29% from 4.33% late Monday.
High yields and interest rates can hurt overall stock prices while simultaneously draining the dollar and enthusiasm from excited parts of the market.
The price of Bitcoin has generally declined since reaching a high of over $73,000 last week. It is notorious for accompanying investors through wild price fluctuations. It continued to fall on Tuesday and fell below $63,900.
In overseas stock markets, Japan's Nikkei 225 rose 0.7% after the Bank of Japan raised its key interest rate for the first time in 17 years. In a historic move, the interest rate was raised back to a range of zero to 0.1% and other changes were made. This ended a long experiment with subzero interest rates intended to stimulate the economy and inflation.
The landmark move was widely expected and still keeps interest rate policy accommodative, analysts said.
Shares fell 1.2% in Hong Kong and 0.7% in Shanghai after troubled real estate developer China Evergrande Group said Beijing's market regulator fined it 4.2 billion yuan ($333.4 million), among other violations US dollars) for allegedly falsifying sales.
Elsewhere in Asia and Europe, stocks were mixed.
` business reporters Matt Ott and Elaine Kurtenbach contributed.
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