Stock market today: Wall Street edged higher on the edge of a new bull market

NEW YORK (AP) U.S. stocks rose on Wednesday and are near the edge of a new bull market for Wall Street.

The S&P 500 was up 0.3% in early trading to break above the 4,292.44 level. If it ends the day there, the main measure of the health of US stock markets would be 20% higher than it was in mid-October. This in turn would signal the end of its painful bear market, which began in early 2022.

The Dow Jones Industrial Average rose 30 points, or 0.1%, to 33,603 as of 9:45 a.m. EST, while the Nasdaq composite was up 0.6%.

Wayfair rose 5% after the home-based retailer said its revenue trends so far this quarter had improved, although average orders were lower. Dave & Busters was also on the winning side, which jumped 21.3% after reporting higher-than-expected earnings for the last quarter.

Campbell Soup, meanwhile, fell 7.4% after reporting weaker-than-expected revenue for the last quarter. It also gave a full-year profit forecast that fell short of analysts’ expectations as price hikes cause some customers to buy less.

The broader market has soared for months on the back of a resilient economy that managed to defy recession forecasts, as well as soaring performance for a handful of big tech companies. Even as it moves from a bear market to a new bull market, many challenges remain.

Chief among them is the question that has plagued Wall Street from the start. Which will come first: a recession or a sufficient drop in inflation to cause the Federal Reserve to lower its interest rates?

That’s why much of Wall Street’s attention is on next week. The US government is expected to release the latest monthly consumer and wholesale inflation updates. The Federal Reserve will also hold its next interest rate meeting.

The prevailing expectation among traders is that the Fed will leave rates stable next week. It would mark the first meeting in more than a year where he did not raise rates. But traders still expect the Fed to start raising rates again in July.

This is key because the purpose of high interest rates is to contain high inflation by slowing the overall economy and hurting the prices of stocks, bonds and other investments. The Fed raised its overnight rate to its highest level since 2007.

Pressure from high rates has already caused cracks in the US banking and manufacturing sectors, although the labor market has remained remarkably strong.

Even though the S&P 500 is close to a bull market, almost as many stocks in it are down for 2023 to the upside.

An expected boost to the global economy failed to materialize, adding to the pressure. In China, trade data points to a further slowdown in the world’s second-largest economy.

China reported that its exports fell 7.5% from a year earlier in May and its imports fell 4.5%, adding to signs of a slowdown in its economic recovery after the lifting in December of anti-COVID controls that have disrupted travel and trade.

The decline in exports was the first year-on-year in three months as export volumes fell below their levels at the start of the year. And with the worst yet to come for many developed economies, we believe exports will continue to slide before bottoming out later this year, said Julian Evans-Pritchard of Capital Economics in a commentary.

Shanghai shares gained 0.1%, while Hong Kong’s Hang Seng rose 0.8%.

Tokyo’s Nikkei 225 index lost 1.8%, the biggest drop in 12 weeks. Analysts said investors were selling to lock in recent gains as prices hit their highest level since the early 1990s.

In Europe, stock market indices have moved little.

In the bond market, the 10-year Treasury yield rose to 3.70% from 3.68% on Tuesday evening. It helps set the rates for mortgages and other large loans.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.