By STAN CHOE, Associated Press Business Writer
NEW YORK (AP) — U.S. stocks are hanging around their records on Wednesday as Wall Street waits to hear from the Federal Reserve in the afternoon about what it will do with interest rates.
The S&P 500 rose 0.3% in early trading. The Dow Jones Industrial Average was up 193 points, or 0.4%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.7% higher. All three indexes are coming off their latest all-time high.
The bond market was also relatively still as the countdown ticked to the announcement from the Fed. The widespread expectation is that it will announce the second cut of the year to its main interest rate in hopes of helping the slowing job market. More important will be whether the Fed gives hints about whether it will keep cutting at its next meeting in December.
The U.S. stock market has surged to records in part because of expectations for continued cuts to rates, which would help make stock prices look less expensive than they’ve become. But the Fed has warned that it may have to halt the cuts if inflation accelerates beyond its still-high level, because lower rates can worsen inflation.
Making an already tough course for Fed officials more difficult is the U.S. government’s shutdown. That has delayed important updates on the economy that would normally help guide the Fed’s decision-making process.
In the meantime, the deluge continues of big U.S. companies reporting how much profit they made during the summer. The pressure is on to deliver growth because that’s another way they can quiet criticism that their stock prices shot too high in recent months.
Caterpillar rallied 9.3% after reporting stronger profit and revenue for the latest quarter than analysts expected. CEO Joe Creed said Caterpillar saw resilient demand, as customers bought more equipment, even with a “dynamic environment.”
CVS Health rose 3.1% after topping analysts’ expectations for the latest quarter, despite big losses related to its decision to reduce openings of new primary care clinics in the future. CEO David Joyner said the” company has “stabilized operations.”
Teradyne soared 19% after the company, which makes automated test equipment and advanced robotics systems, likewise reported a stronger profit than analysts expected. CEO Greg Smith credited strength related to artificial-intelligence applications and said “AI-related test demand remains robust.”
Nvidia, meanwhile, was the strongest force lifting the S&P 500 after rising 4.9%. It became the first company valued at $5 trillion on Wall Street, just three months after the AI darling was the first to break through the $4 trillion barrier.
They helped offset a 3.3% drop for Mondelez International, even though it reported stronger results than analysts expected. The company, whose brands include Oreo cookies and Toblerone chocolate, has been dealing with record-high inflation for the cost of cocoa. It expects challenging conditions to continue in some markets, though it hopes that price increases are moderating for cocoa.
In stock markets abroad, indexes were mixed in Europe following a stronger finish in Asia.
Tokyo’s Nikkei 225 jumped 2.2% to another record. South Korea’s Kospi rose 1.8% after President Donald Trump met with South Korea’s leader following his visit in Japan.
Stocks rose 0.7% in Shanghai ahead of a meeting between Trump and China’s leader, Xi Jinping. The world’s two largest economies have been locked in an escalating trade war, with Washington imposing high tariffs and tightened technology controls and China retaliating with curbs on rare earth shipments, one of its key sources of leverage.
In the bond market, the yield on the 10-year Treasury edged down to 3.98% from 3.99% late Tuesday.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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