Stock market today: Global stocks up as traders await Fed conference for interest rate update

By JOE McDONALD
Associated Press

BEIJING (AP) — Global stocks were higher Monday as traders looked ahead to the Federal Reserve’s summer conference for signs of whether the U.S. central bank thinks inflation is under control or more interest rate hikes are needed to cool inflation.

London, Tokyo, Paris and Wall Street futures advanced. Shanghai declined. Oil prices rose.

Wall Street’s benchmark S&P 500 index declined Friday ahead of this week’s closely watched Jackson Hole, Wyoming, conference. Fed officials have used the event in previous years to indicate changes in policy direction.

There “may be rude hawkish surprises” for investors who assume rate hikes are finished, said Tan Boon Heng of Mizuho Bank in a report. Chair Jerome Powell “may allude to structurally higher (and potentially more volatile) inflation being the new norm.”

In early trading, the FTSE 100 in London rose 0.3% to 7,281.64. The CAC 40 in Paris gained 1% to 7,237.32 and the DAX in Frankfurt advanced 0.6% to 15,672.15.

On Wall Street, the S&P 500 future was up 0.3% and that for the Dow Jones Industrial Average was 0.2% higher.

On Friday, the S&P declined 0.1%. The Dow added 0.1% while the Nasdaq composite slipped 0.2%.

In Asia, the Shanghai Composite Index lost 1.2% to 3,092.97 while the Nikkei 225 in Tokyo advanced 0.4% to 31,565.64. The Hang Seng in Hong Kong lost 1.8% to 17,623.29.

The Kospi in Seoul gained 0.2% to 2,508.80 while Sydney’s S&P-ASX 200 shed 0.5% to 7,115.50.

India’s Sensex gained 0.5% to 65,300.30. New Zealand and Singapore retreated while Bangkok and Jakarta gained.

The S&P 500 soared in the first seven months of 2023 but has given back more than one-quarter of that gain after critics warned the market embraced the notion too early that inflation was under control and rate hikes were finished.

Some investors are shifting money to bonds as higher interest rates make their payout bigger and less risky.

Microsoft slipped 0.1% Friday. Alphabet dropped 1.9% and Tesla sank 1.7%.

Tech and other high-growth stocks are seen as some of the biggest losers due to higher rates. Several are down more than 10% from this year’s highs.

Data indicating U.S. consumer spending and hiring are unexpectedly strong have fueled expectations the Fed might feel pressure to keep its benchmark lending rate higher for longer.

Inflation has declined from its peak above 9% last year but still is above the Fed’s 2% target. Consumer prices rose 3.2% in July over a year earlier, up from the previous month’s 3% increase.

Economists say the last stage of getting inflation down to the Fed’s target may prove the most difficult.

In energy markets, benchmark U.S. crude gained 62 cents to $81.28 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trading, advanced 68 cents to $85.48 per barrel in London.

The dollar edged up to 145.58 yen from Friday’s 145.32 yen. The euro rose to $1.0883 from $1.0878.