Wall Street Inches Higher Tuesday

(AP) -- Stocks edged higher early Tuesday as Wall Street kicked off what's expected to be a quiet, holiday-shortened week of trading.

The S&P 500 was up 0.3%. The benchmark index is near its all-time high set nearly two years ago following its longest winning streak since 2017.

The Dow Jones Industrial Average was up 53 points, or 0.1%, at 37,438 as of 10:05 a.m. Eastern. The Nasdaq composite was 0.4% higher.

Gains in technology stocks helped lift the market. Chipmaker Nvidia rose 1.1%.

Energy stocks climbed along with crude oil prices. Hess rose 1%.

Drugmaker Bristol Myers Squibb said Tuesday that it will acquire RayzeBio in a $4.1 billion deal, just days after buying Karuna Therapeutics for $14 billion. Bristol Myers shares slipped 1%, while RayzeBio doubled to $61.38, close to the $62.50 that each share will fetch in its acquisition.

Treasury yields were slightly higher. The yield on the 10-year Treasury was at 3.91% from 3.90% late Friday.

Wall Street is coming off its eighth straight winning week. Investors have been encouraged by reports showing inflation is on the decline even as the economy appears stronger than expected.

The Federal Reserve is walking a tightrope, seeking to slow the economy enough through elevated interest rates to cool inflation, but not so much that it tips the nation into recession.

Traders are still largely betting the Federal Reserve will cut its main interest rate by at least 1.50 percentage points by the end of next year, according to data from CME Group. The federal funds rate is currently sitting within a range of 5.25% to 5.50% at its highest level in more than two decades.

The Federal Reserve released projections earlier this month showing its typical policymaker expects to cut the federal funds rate several times next year, but likely by only half as much as what Wall Street is expecting.

But many see too much optimism over the pace of interest rate cuts early in the year, and that the big run for stocks since late October on anticipation of such support may be overdone.

European markets remained closed Tuesday.

Shanghai's benchmark led losses in Asia on heavy selling of technology and computer chip-related shares as worries revived over trade tensions with the U.S. and other western countries.

A number of video gaming companies announced share buybacks to shore up prices after Chinese regulators issued draft guidelines on Friday that caused shares in game makers like Tencent and Netease to plunge. Hong Kong markets were closed Tuesday, so the impact of an effort by Beijing on Monday to cushion the impact of the new rules by voicing support for the industry and announcing the approval of more than 100 games was unclear.

The Shanghai Composite index sank 0.7%. In Shenzhen, where relatively more high-tech companies are listed, the A-share index lost 1.2%.