Stock Market Today: Wall Street Remains Near Record Highs After Weak Economic Reports

NEW YORK (AP) — U.S. stocks held near record highs Wednesday after weak economic reports left the door open for possible interest rate cuts later this year.

The S&P 500 index rose 0.2%, a day after setting a record high for the 32nd time this year. The Dow Jones Industrial Average gained 28 points, or 0.1%, as of 10:10 a.m. ET, and the Nasdaq Composite added 0.1% to its record high set a day earlier.

Trading will end early on Wall Street at 1 p.m. Eastern time, ahead of the July 4 holiday.

Tesla helped boost the market again, rising 4.2% a day later reporting a more moderate decline in sales for the spring, which was more than analysts had feared. It was the most powerful force pushing the S&P 500 higher.

Action was stronger in the bond market, where Treasury yields fell after a series of weaker-than-expected reports on the U.S. jobs market and services companies. The data could keep the Federal Reserve on track to implement Wall Street's desired interest rate cuts by year-end.

Business activity in the U.S. real estate, retail and other service sectors contracted in June for only the third time in 49 months, according to a report. That was well below economists' forecasts, which had predicted only slower growth. Perhaps more important for Wall Street, the report also showed that prices are rising at a slower pace.

This follows reports earlier in the morning suggesting a slowdown in the labor market. One said that slightly more American workers applied for unemployment benefits Last week, economists had predicted a rise in hiring, though that figure remains low by historical standards. Another ADP analyst said non-government employers slowed their hiring last month, while economists had expected it to accelerate.

The hope on Wall Street is that the economy will slow just enough to keep a lid on upward pressure on inflationbut not enough to cause layoffs and a recession. A much more anticipated report will be released Friday, when the U.S. government presents its full tally of how many workers employers hired in June.

The yield on the 10-year Treasury note fell to 4.34% from 4.44% late Tuesday, a notable move in the bond market, much of which came after the release of the U.S. services report. It has been falling since April, on hopes that inflation will slow enough to prompt the Federal Reserve to cut its key interest rate, which is the highest level in more than two decades.

Yields have struggled recently, however, as traders see the odds of a Republican victory increasing. in November raise the possibility of tax cuts and other policies which could further increase the US government's debt.

The yield on two-year Treasury notes, which more closely tracks expectations for Fed action, fell to 4.67% from 4.75% late Tuesday. Traders are now betting on a more than 70% chance that the Federal Reserve will cut its key interest rate as early as September, according to data from CME Group.

On Wall Street, Constellation Brands is swinging between gains and losses after the company behind Modelo beer and Robert Mondavi wines reported a profit in the latest quarter that beat analysts' expectations. It cited strength in its beer business, but its revenue for the latest quarter was slightly below analysts' forecasts. Its stock has been flat recently.

In foreign stock markets, indices rose across much of Europe and Asia. France's CAC 40 climbed 1.2 percent to recoup some of its losses, on concerns that the government is moving away from centrist policies. could lead to a much higher French debt.

The FTSE 100 rose 0.6% in London ahead of a upcoming UK electionswhile Tokyo's Nikkei 225 jumped 1.3%.

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AP Business reporters Yuri Kageyama and Matt Ott contributed to this report.