wall street Eyes Record Highs Amid Economic Uncertainty
Wall Street is edging closer to another record as investor optimism, fueled by gains in companies like Tesla, persists despite ongoing economic concerns. The Dow Jones Industrial Average closed higher Monday, bolstered by positive movement in several sectors, though anxieties surrounding inflation and potential recession linger.
A key challenge for the Federal Reserve remains bringing inflation down to its 2% target, a goal that has proven difficult to achieve so far. Concurrently, a slowdown in the job market poses a threat, potentially triggering a recession and offsetting any benefits from lower interest rates.
Former President Trump has been vocal in his demands for more aggressive interest rate cuts, repeatedly criticizing federal Reserve Chairman Jerome Powell – whom he has nicknamed “Too Late” – and even advocating for the removal of a current Fed governor. On monday, Trump posted on his social media network, in his signature all-caps style, “‘Too Late’ must cut interest rates now, and bigger then he had in mind.”
Several companies saw notable movement on Monday.TKO Group climbed 3.8% following the announcement of a $1 billion stock repurchase plan, a move designed to return cash to shareholders and potentially boost per-share results. Intel also rose 3.9% after revising its expense forecast for the year, following the completion of a sale of a 51% stake in its Altera business to Silver lake.
However, not all stocks fared well. Hain Celestial tumbled 25.3% after reporting a larger quarterly loss than the previous year.Interim CEO Alison Lewis acknowledged the company’s performance “has not met expectations” and stated they are working to stabilize sales. Alaska Air Group also experienced a decline, falling 5.5% after citing high fuel costs and increased expenses related to overtime and passenger compensation due to recent operational challenges. Despite these headwinds, the airline noted strong demand for premium seats.
In the bond market,Treasury yields continued their downward trend,reflecting expectations of potential rate cuts by the Federal Reserve.The yield on the 10-year treasury fell to 4.04% from 4.06% late Friday.
Recent economic data released Monday indicated a contraction in manufacturing activity in New York state, the first such decline since June, contrary to economists’ predictions. Investors now await tuesday’s report on U.S. retail sales for further insight into consumer spending.
Overseas, France’s CAC 40 rose 0.9%, while other European and Asian markets saw more moderate gains.
This report includes contributions from AP Writers Yuri Kageyama, Matt Ott and Ken Moritsugu.
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