Stocks rise ahead of Fed meeting
U.S. stocks ticked higher Monday to begin a week packed with potentially market-moving reports.
The Standard & Poor’s 500 index rose 16.21 points, or 0.3%, to 5,116.17, coming off its best week since November. The Dow Jones industrial average added 146.43 points, or 0.4%, to close at 38,386.09, and the Nasdaq composite gained 55.18 points, or 0.3%, to 15,983.08.
This week will see about a third of all S&P 500 companies reporting how much profit they made during the first three months of the year. That includes such heavyweights as Amazon and Apple. So far reports have largely been better than expected, with roughly half the S&P 500’s reports in, highlighted last week by Alphabetand Microsoft.
Domino’s Pizza added to the pile Monday, reporting stronger-than-expected results after a second straight quarter of rising orders for deliveries and carryout. Its stock steamed 5.6% higher.
Tesla was also a big force pushing upward on the market and jumped 15.3%. Its chief executive, Elon Musk, met with a high-ranking Chinese official as it tries to rev up sales in the world’s largest automobile market.
On the losing end was SoFi Technologies, which fell 10.5%. The financial services company reported better results for the latest quarter than analysts expected, but its forecast for net income in the current quarter fell short.
Solid earnings reports last week helped the S&P 500 rally to its first winning week in four. The companies in the index are on track to report a third straight quarter of growth in earnings per share, according to FactSet.
The stock market will need such streng th to steady it after a shaky April. The
S&P 500 fell as much as 5.5% during the month as signals of stubbornly high inflation forced traders to ratchet back expectations for when the Federal Reserve could begin easing interest rates.
After coming into the year forecasting six or more cuts to rates during 2024, many traders are placing bets on just one, according to data from CME Group.
When the Federal Reserve announces its latest policy decision Wednesday, no one expects it to move its main interest rate, which is sitting at its highest level since 2001. Instead, the hope is that the central bank could offer some clues about when the first rate cut could come.
This week’s Fed meeting won’t include the publication of forecasts by Fed officials about where they see rates heading in upcoming years. The last such set of forecasts, released in March, showed the typical Fed official at the time was penciling in three cuts for 2024.
But Fed Chair Jerome H. Powell could offer more color in his news conference after the decision. He suggested this month that rates may stay high for longer because the Fed is waiting for more evidence that inflation is heading sustainably toward its 2% target.
A report hitting Wall Street on Friday could shift policymakers’ outlook even more. Economists expect Friday’s jobs report to show that hiring by U.S. employers cooled in April and that growth in workers’ wages held relatively steady.
In markets abroad, Japan’s stock market was closed for a holiday. Other Asian markets rose, while those in Europe were mixed.
In the bond market, the yield on the 10-year Treasury eased to 4.61% from 4.67% late Friday.