Stock Market Today: Wall Street nears record highs in another quiet trading day

NEW YORK — U.S. stocks are drifting around record highs Tuesday as Wall Street appears headed for another day of quiet trading.

THE&The P 500 was up 0.2% at midday and on track to surpass its record set last week. The Dow Jones Industrial Average was up 78 points, or 0.2%, as of 11:25 a.m. Eastern time, and the Nasdaq composite was up 0.1% a day after setting its latest all-time high.

Indexes have hit record highs largely on expectations that the Federal Reserve will cut interest rates later this year as inflation hopefully cools. Increasing reports showing major U.S. companies are making bigger-than-expected profits have also boosted the market.

Zoom Video Communications added 1% after joining the group of companies that generated a higher profit for the last quarter than analysts expected.

Lam Research also helped support the market after the semiconductor industry supplier announced a share buyback program of up to $10 billion. The company also announced it would do a 10-for-one stock split, which would lower the price of each share and make it more affordable to more investors. Its stock increased by 1.6%.

They helped offset the 4% decline in Palo Alto Networks. The cybersecurity company released a better-than-expected earnings report, but it gave a forecast revenue range for the current quarter whose midpoint was slightly below analysts' expectations.

Trump Media & Technology Group, the company behind Donald Trump's Truth social network, fell 8.5% after disclosing a net loss of $327.6 million in its first quarterly report as a publicly traded company.

Lowes fell 3% despite reporting results for the latest quarter that were better than analysts feared. It said it was maintaining its revenue forecast for this year, including a decline of up to 3% for strong underlying revenue, as high interest rates constrain business activity. clients.

Rates on mortgages, credit cards and other payments have become more expensive because the Federal Reserve has kept its main interest rate at the highest level in more than two decades. This is an attempt to walk a tightrope by crushing the economy just enough through high interest rates to quell high inflation, but not so much as to cause a painful recession.

An encouraging report last week showing that inflation may finally be moving back in the right direction after a discouraging start to the year has raised hopes that such a soft landing for the economy is possible. It also bolstered hopes that the Federal Reserve will cut its main interest rate once or twice this year.

A senior Fed official, Governor Christopher Waller, said in a speech Tuesday that he expects a moderation in economic data after recent reports came in weaker than expected on U.S. retail sales and the strength of American service companies. This in turn should help put downward pressure on inflation.

But he added that he would need several more months of good inflation data before he could comfortably support an easing of monetary policy, unless the labor market weakens significantly before then.

Hopes of future rate cuts have pushed Treasury yields lower, easing pressure on the stock market. The 10-year Treasury yield fell to 4.41% from 4.48% Monday evening. The two-year yield, which more closely tracks expectations for Fed actions, slipped to 4.82% from 4.85%.

This week, there aren't many high-profile economic reports, and the biggest potential for sharp market moves will likely come from upcoming earnings reports.

This week's headliner is Nvidia, whose stock has soared amid frenzy around artificial intelligence technology. It will release its latest quarterly results on Wednesday and expectations are high.

Target also reports Wednesday with Ross Stores following Thursday. They could provide more details on how U.S. household spending is holding up. Pressure has increased on them amid continued high inflation, and it appears to be greatest on customers with the lowest incomes.

In foreign stock markets, indices were down across much of Europe and Asia.

Indices fell 2.1% in Hong Kong and 0.4% in Shanghai after S&P Global Market Intelligence raised its forecast for Chinese economic growth this year to 4.8%, from 4.7% in April, but stressed that it was not overly optimistic.

The overall outlook for a tepid economic recovery remains unchanged, with the expansion supported by strengthened stimulus measures, strengthening external demand and a gradual improvement in private sector confidence, the report said.

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AP Business writers Yuri Kageyama and Matt Ott contributed.