NEW YORK (AP) — Stocks fell on Wall Street on Wednesday, with major stock indexes hovering near the all-time highs they hit last week.
The S&P 500 index was down less than 0.1% in midday trading, the Nasdaq Composite index was up 0.3% and the Dow Jones Industrial Average was down 10 points, or less than 0.1%, as of 11:51 a.m. Eastern time.
About 70% of stocks in the S&P 500 fell, but several large stocks helped cushion the decline.
General Mills Inc., the maker of Cheerios, reported a bigger drop in revenue than analysts expected for its most recent quarter, sending its shares down 4.7%. The company is grappling with declining sales volumes as consumers become more cautious and price-sensitive amid persistent inflation.
Chipotle fell 0.4% on its first day of trading after a 50-for-1 stock split. The company had been one of the most expensive stocks in the S&P 500 Index.
FedEx offset losses with a 14.2% profit increase after the package-shipping company reported much better-than-expected results in its latest quarterly results. Rivian Shares soared 29% after Volkswagen said it would invest up to $5 billion in the struggling electric car maker.
Several big tech companies saw their shares rise, cushioning the impact of the broader market decline. Apple rose 2.3% and Microsoft rose 0.4%. These companies’ stock prices are big and tend to have a big impact on the direction of the market.
The big focus on Wall Street this week will be the government’s latest inflation report, due out on Friday. The personal consumption expenditures (PCE) index is expected to reach 1.5 billion U.S. dollars by 2025. Federal Reserve It’s a favorable indicator of inflation. Wall Street expects it to show inflation easing to 2.6% in May, following 2.7% in April.
The Fed is trying to keep inflation at its 2% target, but inflation has struggled to pick up: PCE has been hovering just below 3% for several months, while the better-known Consumer Price Index has hovered around 3% through 2024, before rising to 9.1% in mid-2022.
The latest information on inflation could influence the central bank’s decision on when to start cutting interest rates, which are at their highest in more than two decades.
“While volatile inflation data may prompt policymakers to tread cautiously, the global deflation process is well established,” Solita Marcelli and other analysts said in a UBS report. “Easing price pressures and other economic considerations should prompt central banks to begin or continue cutting interest rates.”
In the bond market, Treasury yields were mixed. The 10-year Treasury yield rose to 4.30% from 4.25% late Tuesday. It has mostly trended lower since hitting above 4.70% in late April, easing pressure on the stock market.
Investors are hoping the Federal Reserve will start cutting interest rates soon, with Wall Street expecting a cut in interest rates when the central bank meets in September.
The economy has held up relatively well despite inflation and high borrowing costs for consumers and businesses. But growth has slowed and consumers appear to be becoming more stressed and shifting spending toward necessities. Wall Street is hoping the Fed can time interest rate cuts to ease pressures before the economy slows too much, but without missing its goal of keeping inflation in check.
