The actions in Wall Street closed with mixed results on Monday as investors prepare for a two-day meeting of the Federal Reserve this week in which the US central bank is expected to raise interest rates sharply to combat inflation.
The index S&P 500 and the Industrial Average Dow Jones rose slightly, led by energy, utilities and financial stocks. The index Nasdaq Composite, of great technological weight, fell.
Major indices are coming off solid gains last week, following a mix of mostly better-than-expected corporate earnings reports. Falling yields in the bond market also helped, easing pressure on stocks following expectations of Fed rate hikes sent yields soaring for much of this year.
On Wednesday, most economists expect the Fed to announce a rate hike. three-quarters of a percentage point in its short-term interest rate, a second consecutive strong rise that it has not applied since 1994. It would put the Fed’s benchmark rate in a range of 2.25% to 2.5%, the highest since 2018.
The US economy is slowing downbut healthy hiring shows that it is not yet in recessionTreasury Secretary said on Sunday, Janet Yellenon the NBC. He spoke ahead of this week’s release of a series of economic reports that will shed light on an economy currently beset by runaway inflation while interest rates rise.
Some early signs suggest that inflation may be cooling off from red-hot levels. The AAA automobile club indicated Monday on its website that the average price of the gallon of gasoline Normal is $4.36 per gallon. This figure represents a decrease of 16 cents compared to a week ago, and it’s 55 cents cheaper than at the end of June, when the average price was $4.91 per gallon. The price of crude oil has fallen almost 10% this month alone.
On the sidelines of the Federal Reserve meeting, the most prominent report will probably be the Thursdaywhen the Department of Commerce publishes its first estimate of economic production for the April-June quarter. Some economists forecast that it might show a contraction for the second consecutive quarter. The economy contracted 1.6% in the January-March quarter. Two consecutive negative readings are informally considered a recession.
Monday’s results will be quiet, but will pick up later this week when tech heavyweights such as Apple, Meta, Microsoft y Amazonpresent their results. Other large companies that will present their results this week are Coca–Cola y McDonald’swhere investors might see the impact of inflation on these consumer-conscious companies.
Bond yields rose. The two-year Treasury yield, which tends to move with Fed expectations, rose to 3.03% from 2.97% on Friday. The 10-year yield, which influences mortgage rates, rose to 2.82% from 2.78 percent.
(With information from AP)
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