Big week for Wall Street begins with mixed results

Stocks were mixed in quiet trading Monday as Wall Street stays in a holding pattern ahead of a potentially big week.

The S&P 500 rose 2.78 points, or 0.1%, to 4,048.42 after coming off its first winning week in the last four. The Dow Jones Industrial Average gained 40.47 points, or 0.1%, to 33,431.44 and the Nasdaq composite slipped 13.27 points, or 0.1%, to 11,675.74.

The stock market has found some footing over the past week after a rollercoaster start to the year in which a swift rise gave way to a sharp tumble. At the center of it all has been high inflation and expectations for what the Federal Reserve will do about it.

Early this year, stocks rallied and bond yields eased as hopes rose that cooling inflation would have convinced the Fed to take it easier on its interest rate increases. Then, stronger-than-expected reports on the U.S. economy raised worries that inflation is not cooling as smoothly as hoped.

While that calmed worries about an imminent recession, it also forced Wall Street to raise its forecasts for how high the Fed will take interest rates. Higher rates can drive down inflation, but they also hurt prices for stocks and other investments.

On Monday, Treasury yields held relatively steady after their own roller-coaster movements so far this year. The yield on the 10-year Treasury was at 3.97% after topping 4% last week and reaching its highest level since November. The yield helps set rates for mortgages and other loans central to the economy’s strength.

On Wall Street, technology stocks were some of the market’s strongest influences Monday. The companies tend to be some of the biggest beneficiaries of lower interest rates, which can boost demand by investors for highgrowth companies.

Apple Inc. rose 1.9, and Microsoft Corp. ticked up 0.6% to be the two biggest forces lifting the S&P 500.

On the losing end was Tesla Inc., which fell 2%. Over the weekend, the automaker cut the prices of two of its most expensive vehicles.

Overall, bigger action is expected later this week, with several potentially marketmoving events on the calendar.

Fed Chairman Jerome Powell will testify before Congress for two days, beginning today. Other Fed officials’ comments recently have led to big swings in markets as traders try to get ahead of the next moves by the Fed.

Brian Jacobsen, senior investment strategist at Allspring Global Investments, isn’t expecting anything surprising from the testimony. That’s partly because an important data release is scheduled for Friday, one that is expected to cause a big swing in the Fed’s thinking.

The federal government will release its latest monthly jobs report Friday. If the reading is stronger than expected, particularly if it shows a big gain in wages, the report is expected to shake Wall Street and force it to raise rate expectations even higher.

The Fed has been trying to cool growth in wages to remove pressure on inflation, which remains far above its 2% target, and blowout figures are expected to cause it to get more aggressive about rates.

The Fed’s next move on rates will arrive later this month. Aside from Friday’s jobs report, upcoming releases on inflation across the economy will likely also carry a lot of weight on the decision.

The Fed has pulled its key overnight rate to a range of 4.50% to 4.75%, up from virtually zero at the start of last year, in its fastest set of increases in decades. Last month, policymakers dialed down the latest rate increases and highlighted progress being made in the battle to get inflation lower.