Wall Street Holds Relatively Steady Monday

NEW YORK (AP) -- U.S. stocks are holding relatively steady Monday, as markets around the world stabilize following a wild week of extreme swings.

The S&P 500 was up 0.3% in early trading. The Dow Jones Industrial Average was down 4 points, or less than 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.4% higher.

Many European and Asian stock markets were also relatively quiet. That's a notable turn after last week kicked off with the worst day for Japanese stocks since the Black Monday crash of 1987, only to give way to the best day since 2022 for U.S. stocks.

The value of the Japanese yen eased on Monday, calming some more after its earlier surge sent shockwaves through markets worldwide. The sharp rise for the Japanese yen following a hike to interest rates by the Bank of Japan forced many hedge funds and investors to abandon a popular trade all at once, where they had borrowed yen at cheap rates to invest elsewhere. The forced selling reverberated around the world.

A promise last week by a top Bank of Japan official not to raise rates further as long as markets are "unstable" has helped calm the market. But other worries were also behind last week's turbulence for markets, including concerns about a slowing U.S. economy.

This upcoming week will feature reports on inflation and how much U.S. shoppers are spending at retailers. The best-case scenario for Wall Street would be data showing a continued slowdown in inflation, combined with strengthening U.S. retail sales. That would be an indication that the Federal Reserve is successfully walking the tightrope that it's been attempting since it began hiking interest rates sharply in 2022: It wants the U.S. economy to slow by enough to snuff out high inflation, but not so much that it causes a recession.

A string of worse-than-expected data on the economy has raised worries about whether the Fed is leaning too far to one side on the tightrope after keeping its main rate at a two-decade high for about a year. The lowlight was a report earlier in the month showing U.S. employers hired far fewer workers than expected last month. The economy is still growing, and many economists see a recession as unlikely, but fear is rising.

Such worries about a potentially weakening economy have put downward pressure on Treasury yields in the bond market. They were holding relatively steady on Monday ahead of the upcoming data reports. The yield on the 10-year Treasury ticked up to 3.96% from 3.94% late Friday.

The two-year Treasury yield, which more closely tracks expectations for Fed action, rose to 4.07% from 4.06%.

On Wall Street, KeyCorp jumped 15.3% after the regional bank announced a $2.8 billion investment from the Bank of Nova Scotia. The Cleveland bank said the cash influx will allow it to drive further growth in its investment banking and wealth management businesses.

Several big companies will also report their latest earnings results later in the week, including Walmart and Home Depot. Most big U.S. companies have been reporting better profits for the spring than analysts expected, and retailers will be in the spotlight now as they close out the reporting season.

Worries are rising that Americans may pull back on their spending because prices are still high, even if they're no longer increasing as quickly as they once were. Still, economists believe there is some growth in sales after they stalled in June.