NEW YORK (AP) – U.S. stock indexes came to a near standstill again Tuesday as traders made final moves ahead of several potentially market-moving reports.
The S&P 500 rose 7.52 points, or 0.1%, to 5,209.91, after barely rising the previous day. The Dow Jones Industrial Average fell 9.13 points, or less than 0.1%, to 38,883.67, and the Nasdaq Composite Index rose 52.68 points, or 0.3%, to 16,306.64.
Treasury yields fell in the bond market ahead of Wednesday's much-awaited update on U.S. consumer-level inflation. Other reports on inflation will be released this week, as major U.S. companies begin reporting how much profit they made in the first three months of the year.
The main question hanging over Wall Street is whether inflation will cool enough to convince the Fed to cut interest rates, which traders are desperate for and are betting on.
Traders now expect only two or three rate cuts this year, with some doubts raised after a series of better-than-expected economic reports. Some people say there is zero possibility. This is lower than the expected six to seven job cuts at the beginning of the year, according to CME Group data.
The Fed's key interest rate is at its highest level in more than 20 years, and there are concerns that if rates remain high for too long they could trigger a recession.
If this year's cuts are smaller, companies will be burdened with significantly higher profits to justify the S&P 500's nearly 25% rise since the end of October. Critics say the stock looks expensive on several measures and say earnings need to rise or interest rates need to fall to make the stock look more reasonable.
Bank of America strategists expect Wednesday's inflation update to show a subside after ignoring food and energy prices, which can zigzag sharply. Such an outcome is likely to increase traders' expectations for a rate cut in June, with the market currently looking at a slight rate cut as better than the odds of a coin toss.
This year's rise in oil prices has raised concerns about spillovers into inflation, but the central bank has said that “to have a meaningful impact on core inflation, the levels seen even at the peaks in commodity prices in Russia and Ukraine are necessary.'' It is highly likely that oil prices will need to rise by a significant amount. U.S. strategists said in a BofA Global Research report.
Benchmark U.S. crude oil fell $1.20 a barrel to settle at $85.23, marking a year-to-date gain of less than 20%. Brent crude, the international standard crude, fell 96 cents to $89.42 per barrel.
On Wall Street, Apple rose 0.7%, helping lift the S&P 500. Reduced annual loss to less than 12%.
Norfolk Southern Railway rose 1.3% despite the railroad's preliminary first-quarter results falling short of analysts' expectations.
The company has agreed to pay $600 million to settle a class action lawsuit related to last year's fiery train derailment in eastern Ohio. The company says if the agreement is approved by a court, it will resolve all class action claims within a 20-mile radius of the derailment and personal injury claims within a 10-mile radius if you choose to participate. .
Some of Wall Street's biggest losses have come from the same stocks that have been the biggest winners in the market frenzy over artificial intelligence technology.
Nvidia fell 2%, having the biggest impact on the S&P 500 as it is one of the biggest players in the market. The supermicrocomputer has fallen 2.6%, but its stock has more than tripled so far this year.
Tilray Brands fell 20.7% after the cannabis company reported slower revenue growth in its latest quarter than analysts expected.
In the bond market, the yield on the 10-year U.S. Treasury note fell to 4.35% from 4.42% late Monday.
In Europe, stock indexes fell ahead of the European Central Bank's decision on interest rates on Thursday. Many investors expect interest rates to remain unchanged.
Asian stock indexes were mixed, with Tokyo's Nikkei 225 rising 1.1%, while South Korea's Kospi fell 0.5%.
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AP writers Matt Ott and Zimo Zhong contributed.
