Wall Street ticks toward another record as Tesla vrooms higher
NEW YORK (AP) — U.S. stocks are ticking higher on Monday at the start of a week that could show whether Wall Street’s record-breaking rally has been overdone or prescient.
The S&P 500 rose 0.4% and was on track to squeak past its latest all-time high, which was set last week. The Dow Jones Industrial Average was up 43 points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.5% higher.
Tesla helped lead the way and rose 7.2% after Elon Musk bought stock worth roughly $1 billion through a trust. The electric vehicle company’s stock price came into the day with a slight loss for the year so far, and the purchase could be a signal of Musk’s faith in it.
That helped overshadow a 1.6% dip for Nvidia after China accused the chip company of violating its antimonopoly laws. Chinese regulators did not mention a punishment for Nvidia in their one-sentence statement but did say they would carry out “further investigation.”
The main event for the market, though, isn’t arriving until Wednesday. That’s when the Federal Reserve will announce its latest decision on interest rates, and the unanimous expectation is that it will announce its first cut of the year. Such a move could give a kickstart to the job market, which has been slowing.
Stocks have already run to records on the assumption that a cut is coming on Wednesday, though. Expectations are also high that the Fed will keep cutting rates through the end of this year and into 2026. That creates the possibility for disappointment in the market, which would mean drops for stock prices, if the Fed doesn’t end up cutting as aggressively as traders expect.
That’s why more attention will be on what Fed Chair Jerome Powell says in his press conference following the decision than on the decision itself. Fed officials will also release their latest projections for where they see interest rates and the economy heading in upcoming years, which will be another potential flashpoint.
What could spook the Fed and cut off the chance for more cuts is a jump in inflation. That’s because lower interest rates can give inflation more fuel and send it even higher. And inflation has proven difficult to get under the Fed’s 2% target, while President Donald Trump’s tariffs threaten to move it higher.
Another threat to the market is if the job market slows too much. In that case, the resulting recession could mean a downturn in corporate profits big enough to swamp whatever benefit lower interest rates bring in the short term and pull stocks lower.
Trump, meanwhile, has been pushing angrily for more cuts to interest rates. He’s often attacked Powell personally, nicknaming him “Too Late,” and is pushing for the removal of one of the Fed’s governors from its board.
“‘Too Late’ must cut interest rates now, and bigger than he had in mind,” Trump wrote on his social media network Monday, using his trademark all-caps style.
In the bond market Treasury yields eased a bit, continuing their sharp downward run on expectations for coming cuts to rates by the Fed.
The yield on the 10-year Treasury fell to 4.04% from 4.06% late Friday.
In stock markets abroad, France’s CAC 40 climbed 1%, while indexes moved more modestly across the rest of Europe and Asia.
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AP Writers Yuri Kageyama, Matt Ott and Ken Moritsugu contributed.
By STAN CHOE
AP Business Writer
