Stock market today: Wall Street points higher ahead of Fed interest rate decision, more earnings

By ZIMO ZHONG and MATT OTT
Associated Press

Wall Street pointed toward gains before markets opened Monday ahead of another crush of corporate earnings and the Federal Reserve’s decision on interest rates.

Futures for the S&P 500 gained 0.7% before the bell, while futures for the Dow Jones Industrial Average rose 0.6%.

McDonald’s shares jumped nearly 3% after the burger chain reported better-than-expected sales and profit in the third quarter as popular promotions brought in customers despite higher U.S. prices.

Also coming this week are the latest quarterly results from Pfizer, Caterpillar, JetBlue, CVS Health, Starbucks and Apple.

A mixed set of economic reports Friday didn’t appear to alter Wall Street’s expectations that the Federal Reserve will keep its benchmark rate of above 5.25% unchanged when it wraps up its two-day meeting Wednesday. The U.S. central bank has raised its benchmark rate 11 times since March of 2022 in a bid to tame persistently elevated inflation.

On Friday, a report showed that the Fed’s preferred measure of inflation remained high last month, but within economists’ expectations. Spending by U.S. consumers was stronger than expected, even though growth in their incomes fell short of forecasts.

Stocks stumbled to close the week, with the S&P 500 falling 0.5% to 10% below the peak it reached in July.

That put benchmark index into what’s called a “correction.” Stocks have fallen the past three months as investors face the reality of higher interest rates, with Federal Reserve officials talking about keeping rates “higher for longer.”

The Dow Jones Industrial Average fell 1.1% on Friday and the Russell 2000 index of smaller company stocks slipped 1.2%, closing at its lowest level in about four years. The Nasdaq was the bright spot in the market, gaining 0.4%.

The yield on the 10-year Treasury has been hovering at levels not seen since 2007. On Monday it was at 4.85%. Its rise from less than 3.50% in the spring to more than 5% earlier last week has sent prices tumbling for older bonds already trading in the market.

The yield on the 2-year Treasury was up to 5.05% early Monday from 5.01% Friday.

In Asian markets on Monday, Tokyo’s Nikkei 225 index lost 1% to 30,696.96. There is speculation, given recent signs of sustained inflation, that the Bank of Japan may make adjustments to its monetary policy in a meeting that ends on Tuesday.

Over the weekend, more than 30 companies listed in China revealed intentions to conduct share buybacks and purchases after China announced a slew of measures aimed at stabilizing falling stock prices. The Shanghai Composite index rose 0.1% to 3,021.55.

Also Monday, a Hong Kong court delayed China Evergrande’s winding up hearing until Dec. 4. The property developer’s default on debt obligations has made it the world’s most indebted real estate developer and dragged on China’s economic growth. The Hang Seng in Hong Kong edged 7 points higher to 17,356.96.

Australia’s S&P/ASX 200 slipped 0.8% to 6,772.90.

South Korea’s Kospi added 0.3% to 2,310.55. Taiwan’s Taiex edged up 0.1% and the SET in Bangkok climbed 0.5%.

Germany’s DAX rose 0.5% and the CAC 40 in Paris advanced 0.6%, while Britain’s FTSE 100 surged 0.7%.

Concerns over an escalation of the Israel-Hamas war have added to uncertainty. Israeli ground forces conducted incursions into Gaza over the weekend and Prime Minister Netanyahu warned of a “long and difficult” war.

Still, a barrel of benchmark U.S. oil fell $1.11 to $84.43 a barrel in electronic trading on the New York Mercantile Exchange. It slipped 99 cents to settle at $84.54 on Friday. Brent crude, the international standard, slipped $1 to $87.20 per barrel.

In currency trading, the U.S. dollar rose to 149.73 Japanese yen from 149.59 yen. The euro cost $1.0588, up from $1.0567 late Friday.

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