NEW YORK (AP) — Share prices on the New York Stock Exchange moved little on Tuesday, ahead of reports this week that could rock markets.
The S&P 500 had its smallest one-day change in more than a year, shedding 0.17 points, less than 0.1%, to end at 4,108.94. Most stocks in the benchmark index rose, as did the Dow Jones industrial average, which gained 98.27 points, or 0.3%, to 33,684.79. The Nasdaq Composite lost 52.48 points, or 0.4%, to 12,031.88.
The most pressing immediate question for Wall Street has been whether the Federal Reserve will continue to raise interest rates in its bid to rein in high inflation. It has already raised rates at a breakneck pace over the past year, enough to slow some parts of the economy and put pressure on the banking system.
That is why markets are preparing for the inflation report to be released on Wednesday. Economists expect it to show that the price rise eased to 5.2% in March from 6% in February. That would represent continued progress since inflation peaked last summer, but it would also still be well above the Fed’s target.
A higher-than-anticipated reading would likely fuel traders’ expectations that the central bank will raise rates another quarter of a percentage point at its next meeting scheduled for May. Higher rates can reduce inflation, but they also increase the risk of a future recession and affect the prices of stocks and other investments.
Bond market traders have been nervous about the Fed going too far with rates and then having to cut rates in the summer to prop up the economy. But the stock market has remained more resilient, helped by hopes that the Fed can raise rates enough to control inflation without causing any serious recession.
“While the shaky market narrative is not easy to navigate, it helps that rates are taking a more bearish outlook compared to stocks, which are leaning towards a more bullish outlook,” said Mark Haefele, chief investment officer at UBS. Global Wealth Management. That’s one of the reasons why he prefers high-quality bonds over stocks.
In the bond market, yields were relatively stable. The yield on the 10-year Treasury bond remained at 3.42%.
Associated Press writers Elaine Kurtenbach and Matt Ott contributed to this report.
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