Stock market today: Wall Street continues with another week of gains

NEW YORK (AP) — U.S. stocks ended higher after mixed signals on big bank profits and inflation failed to shake Wall Street’s belief that lower interest rates are on the way. The S&P 500 index rose 0.6% Friday in a broad-based rally, capping its fifth winning week in the past six. The Dow Jones Industrial Average climbed 0.6% and the Nasdaq Composite Index gained 0.6%. Smaller company stocks outperformed the rest of the market. Treasury yields wavered in the bond market but remained slightly lower after a report showed inflation at the big-dollar level was worse than expected last month.

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NEW YORK (AP) — U.S. stocks headed for record highs Friday after mixed signals on the profits of the big banks And inflation That hasn't really shaken Wall Street's belief that lower interest rates are coming.

The S&P 500 index rose 1.2% as part of a broad rally, capping its fifth week of gains in the past six. The Dow Jones Industrial Average rose 431 points, or 1.1%, and the Nasdaq Composite gained 1.4% with less than an hour to go. All three indexes are on track to set all-time highs.

Bank of New York Mellon rose 5.4%, one of the market's biggest gains after reporting spring profit that beat analysts' expectations. Nvidia and others Highly influential Big Tech stocks also helped revive the market after a drop the day before, which interrupted its surge amid a frenzy around artificial intelligence technology.

Those numbers helped offset a slide at Wells Fargo, which fell 5.8%, even though the San Francisco-based bank reported profit that beat analysts' expectations. It said a key measure of its underlying profit fell from a year ago and its net interest income could remain in the lower half of the range it had forecast for the full year.

In the bond market, which has seen some of the strongest action on Wall Street this week, Treasury yields fluctuated after the latest inflation update. Wholesale prices rose more last month than economists expected, disappointing after data released Thursday showed consumer inflation. It was better than expected.

But after some initial fluctuations, Treasury yields calmed and remained lower than they were late Thursday.

It will be some time before we know whether yesterday's number or today's was the aberration, said Chris Larkin, managing director of trading and investments at Morgan Stanley's E-Trade.

Part of the acceleration in Friday's data could be the result of higher corporate profit margins, which can fluctuate widely and which some analysts have called unrelated to the Federal Reserve's inflation fighters.

Another factor that helped keep yields steady was a report suggesting that U.S. households are no longer worried about such high inflation in the future. According to preliminary data from the University of Michigan, U.S. consumers are expecting inflation to be 2.9% for the coming year.

This is the second straight month that those expectations have eased. That has helped ease concerns about a potential spiral in which expectations of high inflation could prompt U.S. consumers to engage in behavior that pushes inflation higher. That in turn could give the Federal Reserve more evidence of the slowdown in inflation it says it needs to start reducing your main interest ratewhich is at its highest level in more than two decades.

After climbing to 4.23% following the headline inflation report, the yield on the 10-year Treasury note fell to 4.18% from 4.21% late Thursday. It is down from 4.70% in April, as hopes have grown that inflation is slowing enough to convince the Fed to cut rates in the short term.

Traders are pricing in a 94% chance that the Federal Reserve will begin cutting rates in September, according to CME Group data. Lower interest rates would relieve pressure that has built up on the economy due to the high cost of borrowing to fund foreign exchange transactions. buy housescars or anything on credit cardFed officials, however, have said They want to see more reliable inflation data before acting.

Lower interest rates would help all types of companies, and smaller ones could benefit especially greatly as they borrow to grow. The small stocks in the Russell 2000 rose more than the S&P 500 on Thursday after encouraging data on consumer inflation, snapping a long-running trend that continued Friday.

The Russell 2000 index rose 1.4% and is on track for its best week since November.

Of course, traders have a long history of being premature in terms of forecasts of cuts JPMorgan Chase CEO Jamie Dimon warned Friday that inflation and interest rates could remain higher than the market expects because of rising U.S. government debt and other factors.

In overseas stock markets, Japan's Nikkei 225 index lost some of its recent record high and fell 2.4 percent, although it is still up more than 23 percent since the start of the year.

The indices were mixed in the rest of Asia and higher in much of Europe.

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AP reporters Matt Ott and Zimo Zhong contributed to this report.

Stan Choe, Associated Press