Dow Rises Toward Record as Most of Wall Street Drifts in Mixed Trading

NEW YORK (AP) -- U.S. stock indexes are drifting closer to their records Monday as Wall Street gears up for the most anticipated meeting of the Federal Reserve in years.

The S&P 500 was 0.1% higher in morning trading and pulling within 0.7% of its all-time high set in July. The Dow Jones Industrial Average was on track to set its own record and up 265 points, or 0.6%, as of 10:05 a.m. Eastern time. The Nasdaq composite was down 0.5%, hurt by drops for some Big Tech stocks including Apple and Nvidia.

Oracle rose 4.3% to help lead the market, continuing a strong run that began last week with a better-than-expected profit report. Oil-and-gas stocks climbed after oil prices rose roughly 2% to recover some of their sharp drops since the spring. Alcoa also jumped 9% after saying it would sell its ownership stake in a Saudi Arabian joint venture to Saudi Arabian Mining Co. for $950 million in stock and $150 million in cash.

Treasury yields edged lower in the bond market ahead of what's expected to be the week's main event. On Wednesday, the widespread expectation is for the Federal Reserve to cut its main interest rate for the first time in more than four years to deliver some relief to the economy.

The only question is by how much the Fed will cut. Traders are shifting more bets toward a larger-than-usual move of half a percentage point, according to data from CME Group. They're anticipating a 61% chance the Fed will go beyond the more traditional cut of a quarter of a percentage point. That's up from 50% on Friday and just 30% a week ago.

The difference between a half-point cut and a quarter may sound academic, but it can have far-ranging effects. While lowering rates relieves pressure on the economy, it can also give inflation more fuel.

The Federal Reserve has been keeping its main interest rate at a two-decade high in hopes of slowing the economy enough to stifle high inflation. With inflation having eased substantially from its peak two summers ago, the Fed has said it can turn more focus to bolstering the slowing job market and economy. Some critics say it may be moving too late, increasing the risk of a possible recession.

In the bond market, the yield on the 10-year Treasury edged down to 3.65% from 3.66% late Friday. The two-year yield, which moves more closely with expectations for the Fed, eased to 3.57% from 3.59%.

That was despite a report in the morning showing manufacturing in New York state returned to growth in September. That surprised economists, who were expecting another month of contraction for an area of the economy that's been hit hard by high interest rates.

On Wall Street, Carl Icahn's Icahn Enterprises rose 9.4% after it said a U.S. judge dismissed a proposed class-action lawsuit against the company, one based on allegations by a research firm that looks for financial irregularities and tries to profit when the stock prices fall.

Fertilizer producer Mosaic fell 3.7% after it said electrical equipment failures at mines and Hurricane Francine will reduce its production of potash and phosphate in the current quarter.

In stock markets abroad, indexes were mixed amid modest movements across Europe and Asia. Hong Kong's Hang Seng added 0.3% after data released over the weekend showed China's economy slowed further in August.

Markets in Japan, mainland China and South Korea were closed for holidays.

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AP Writers Matt Ott and Zimo Zhong contributed.

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