US Stocks Gain Ground Ahead of Inflation, Earnings Updates
NEW YORK (AP) -- Stocks rose in morning trading on Wall Street Wednesday as investors get ready for a highly anticipated inflation update and several big corporate earnings reports later in the week.
The S&P 500 rose 0.5% as of 10:15 a.m. Eastern. The Dow Jones Industrial Average rose 72 points, or 0.2%, to 33,778 and the Nasdaq rose 0.8%. Every major index is on track for weekly gains in what has been a strong start to the year following a dismal 2022.
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Retailers and technology stocks had some of the biggest gains. Home Depot rose 1.2% and Microsoft gained 2.2%.
Bond yields were mixed. The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.57% from 3.61% late Tuesday.
Trading has been mostly quiet and uncertain throughout the week. Inflation and the Federal Reserve's fight against high prices remains the big focus for investors. Wall Street has been hoping that cooling inflation and a slowing economy could convince the central bank to ease off its aggressive interest rate increases that have weighed on investment prices and risk bringing on a recession.
The next big event for markets is Thursday's update from the government on consumer inflation for December. Economists expect the December report to show U.S. inflation slowed further to 6.5% from 7.1% in November and from a peak of more than 9% in the summer.
The Fed has pledged to keep interest rates higher until it is certain inflation is easing. Its benchmark interest rate stands at 4.25% to 4.5%, compared with near zero early last year.
A worse-than-expected inflation reading could dash hopes on Wall Street that the Fed may stop its hikes soon and perhaps even cut rates by the end of the year. Some investors see the economy successfully walking the tightrope of slowing enough to snuff out high inflation but not so much as to cause a painful recession.
Wall Street is already getting more information on how companies are handling the persistent squeeze on consumers from inflation, with retailers warning about weaker demand hurting revenue and tech companies laying off workers. Earnings season will ramp up Friday when several big companies report results.
Bank of America, Delta Air Lines, JPMorgan Chase and UnitedHealth will report results on Friday.
Markets in Asia were mixed overnight and markets in Europe rose.