NEW YORK (AP) — U.S. stocks were on track for a record rally Monday, adding to last week's gains.
As of 10:30 a.m. ET, the S&P 500 was up 0.6%, just above its all-time high reached two weeks ago. The Dow Jones Industrial Average beat its own record set on Friday by 503 points, or 1.1%, and the Nasdaq Composite rose 0.5%.
Bond yields also fell in the bond market after President-elect Donald Trump expressed his desire to do so, in what some analysts called a “becent bounce.” scott bessentThe hedge fund manager becomes Treasury Secretary.
Mr. Bessent has advocated reducing the U.S. government's deficit (how much more it spends than it takes in taxes and other revenues). Such an approach can be soothing Worry about growth on Wall Street President Trump's policies could lead to even larger budget deficits. rising inflation ratewhich in turn will put upward pressure on government bond yields.
The yield on the 10-year U.S. Treasury rose above 4.44% shortly after President Trump's election, but has fallen to 4.29% from 4.41% late Monday. This is a notable move, as lower yields make borrowing cheaper for all types of businesses and households. It also pushes up the prices of stocks and other investments.
Two-year Treasury yields, which are more closely tied to market expectations of what the Federal Reserve will do with overnight interest rates, also fell.
The Fed started lower key interest rates It rose from a 20-year high just a few months ago and hopes to maintain that level. The roar of the job market after getting high Inflation has almost completely fallen We have reached 2% of our goal. But immediately after Trump's victory, traders reduced their bets on how much the Fed would cut rates next year. They worried that Mr. Trump, who favors lower taxes and increased spending on the border, would balloon the national debt. Traders on Monday again increased bets on the number of possible rate cuts in 2025, according to CME Group data.
The report released Wednesday could influence how much the Fed cuts interest rates. Economists expect the underlying inflation trend, which the Fed wants to capitalize on, to show that it accelerated to 2.8% last month from 2.7% in September. If inflation rises, the Fed will be reluctant to cut rates as much or as quickly as it would otherwise.
Goldman Sachs economist David Mericle expects the rate to slow to 2.4% by the end of next year, but absent expected tariff hikes on Chinese imports and Trump's favorite cars. He said this rate would be even lower.
In the stock market, Bath & Body Works The company rose 17.4% after its latest quarterly profit beat analysts' expectations. The personal care products and home fragrance retailer has revised its full-year earnings forecast upward, even though it still sees a “volatile retail environment” and expects this year's holiday shopping season to be short.
A major focus is on how American shoppers can remain resilient as prices remain high across the economy and interest rates remain high. Last week, two major retailers sent mixed messages. target has fallen After stating the harsh forecast for the year-end sales season. Subsequently walmartwhich gave a much more encouraging outlook.
Macy's, another retail giant, said Monday that sales for its latest quarter were in line with expectations, but that its full earnings release would be postponed. it is, One employee intentionally hid up to $154 million in shipping costs. Additional time is required to complete the investigation.
Macy's stock fell 3.2%.
Among the market leaders were several companies related to the housing industry. Monday's drop in U.S. Treasury yields could lead to an easing in mortgage rates, which could lead to more activity in the housing market. Construction materials supplier Builders First Source rose 7.9%, the biggest gainer among the S&P 500.
Among home builders, DR Horton rose 6.9%, Pulte Group rose 6.1% and Lennar rose 5.6%.
In overseas stock markets, indexes were mixed in Asia, followed by modest movements across much of Europe.
In the cryptocurrency market, Bitcoin It was trading below $96,000 after threatening to hit $100,000 for the first time late last week.
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AP Business Writer Elaine Kurtenbach contributed.