NEW YORK (AP) — U.S. stock indexes remained stuck in place on Tuesday as Wall Street made few big moves ahead of what’s expected to be the first cut to interest rates in more than four years.
The S&P 500 edged up by 1.49, or less than 0.1%, to 5,634.58. It remains 0.6% below its all-time closing high set in July, and it briefly rose above that mark during the morning.
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The New York Stock Exchange, with a banner for American Eagle Outfitters, is shown on Tuesday, Sept. 17, 2024, in New York. (AP Photo/Peter Morgan)
FILE - The American flag hangs from the front of the New York Stock Exchange on Sept. 10, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - A person stands in front of an electronic stock board showing Japan's Nikkei index at a securities firm in Tokyo, on May 28, 2024. (AP Photo/Eugene Hoshiko, File)
FILE - People walk in front of Tokyo Stock Exchange building in Tokyo, on May 28, 2024. (AP Photo/Eugene Hoshiko, File)
The Dow Jones Industrial Average slipped 15.90 points, or less than 0.1%, to 41,606.18 from its own record set the day before, while the Nasdaq composite edged up by 35.93, or 0.2%, to 17,628.06.
Intel helped drive the market with a gain of 2.7% following a series of announcements, including an expansion of its partnership with Amazon Web Services to produce custom chips. Intel also detailed plans to build its foundry business.
That helped offset a 2.2% drop for Philip Morris International, which said it expects to record a loss of $220 million against its third-quarter results because of the sale of its Vectura Group inhaled-therapeutics subsidiary.
The calm movements for the U.S. stock market overall were a sharp departure from prior weeks, during which the S&P 500 briefly fell nearly 10% below its all-time high. At the time, global markets were reeling on worries that a slowing U.S. economy could fall into a recession, along with some technical factors that forced hedge funds around the world to back out of a popular trade all at once.
Since then, excitement has built about an announcement scheduled for Wednesday afternoon from the Federal Reserve. The unanimous expectation on Wall Street is that the Fed will cut the federal funds rate, which has been sitting in a range of 5.25% to 5.50% for more than a year.
Lower rates would make things easier for the economy, which has already begun to slow because it’s become so expensive to borrow money for everything from houses to cars to corporate debt. The Fed has been keeping its main interest rate at a two-decade high in hopes of grinding down on the economy enough to stifle high inflation.
Now that inflation is down substantially from its peak two summers ago, the Fed believes it can shift its focus more toward protecting the job market and economy. The only question is how much the Fed will cut rates by, and that is a delicate balancing act.
While lowering rates gives a boost to the overall economy and to financial markets, it can also give inflation more fuel. Some critics say the Fed is already moving too late to help the economy, while others warn of inflation staying stubbornly higher than it has in the past.
The general expectation on Wall Street is for the Fed to deliver a larger-than-usual cut of half of a percentage point on Wednesday, according to data from CME Group. But it’s not a certainty. Traders are still betting on a 35% probability for a traditional-sized move of a quarter of a percentage point,
Economic reports released Tuesday did little to change those expectations. One said U.S. shoppers spent more at retailers last month than expected. That’s an encouraging signal indicating strength for the heart of the U.S. economy, but details underneath the surface may have been more discouraging. After ignoring automobiles and fuel, sales at U.S. retailers last month were a touch weaker than economists expected.
“This data isn’t going to decide the issue for the Fed, one way or the other,” Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley, said about the size of Wednesday’s rate cut.
A separate report that came later in the morning said U.S. industrial production returned to growth in August and was stronger than economists expected.
In the bond market, the 10-year Treasury yield rose to 3.64% from 3.62% late Monday. The two-year yield, which more closely tracks expectations for the Fed’s actions, rose to 3.59% from 3.56%.
In stock markets abroad, Japan’s Nikkei 225 fell 1% after the value the Japanese yen ticked higher against the U.S. dollar.
The yen has been rising on expectations the Bank of Japan will continue to head in the opposite direction of the Federal Reserve and keep raising interest rates. A stronger yen can hurt the profits of Japan’s big exporters.
Stock indexes rose modestly across much of Europe, while markets were closed in mainland China and South Korea.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
The New York Stock Exchange, with a banner for American Eagle Outfitters, is shown on Tuesday, Sept. 17, 2024, in New York. (AP Photo/Peter Morgan)
FILE - The American flag hangs from the front of the New York Stock Exchange on Sept. 10, 2024, in New York. (AP Photo/Peter Morgan, File)
FILE - A person stands in front of an electronic stock board showing Japan's Nikkei index at a securities firm in Tokyo, on May 28, 2024. (AP Photo/Eugene Hoshiko, File)
FILE - People walk in front of Tokyo Stock Exchange building in Tokyo, on May 28, 2024. (AP Photo/Eugene Hoshiko, File)
Federal Reserve Chair Jerome Powellsaid Sunday the Department of Justice has served the central bank with subpoenas and threatened it with a criminal indictment over his testimony this summer about the Fed’s building renovations.
The move represents an unprecedented escalation in President Donald Trump’s battle with the Fed, an independent agency he's repeatedly attacked for not cutting its key interest rate as sharply as he prefers. The renewed fight will likely rattle financial markets Monday and could over time escalate borrowing costs for mortgages and other loans.
The subpoenas relate to Powell’s testimony before the Senate Banking Committee in June, the Fed chair said, regarding the Fed’s $2.5 billion renovation of two office buildings, a project Trump has criticized as excessive.
Here's the latest:
Stocks are falling on Wall Street after Federal Reserve Chair Jerome Powell said the Department of Justice had served the central bank with subpoenas and threatened it with a criminal indictment over his testimony about the Fed’s building renovations.
The S&P 500 fell 0.3% in early trading Monday. The Dow Jones Industrial Average lost 384 points, or 0.8%, and the Nasdaq composite fell 0.2%.
Powell characterized the threat of criminal charges as pretexts to undermine the Fed’s independence in setting interest rates, its main tool for fighting inflation. The threat is the latest escalation in President Trump’s feud with the Fed.
▶ Read more about the financial markets
She says she had “a very good conversation” with Trump on Monday morning about topics including “security with respect to our sovereignties.”
Last week, Sheinbaum had said she was seeking a conversation with Trump or U.S. Secretary of State Marco Rubio after the U.S. president made comments in an interview that he was ready to confront drug cartels on the ground and repeated the accusation that cartels were running Mexico.
Trump’s offers of using U.S. forces against Mexican cartels took on a new weight after the Trump administration deposed Venezuelan President Nicolás Maduro. Sheinbaum was expected to share more about their conversation later Monday.
A leader of the Canadian government is visiting China this week for the first time in nearly a decade, a bid to rebuild his country’s fractured relations with the world’s second-largest economy — and reduce Canada’s dependence on the United States, its neighbor and until recently one of its most supportive and unswerving allies.
The push by Prime Minster Mark Carney, who arrives Wednesday, is part of a major rethink as ties sour with the United States — the world’s No. 1 economy and long the largest trading partner for Canada by far.
Carney aims to double Canada’s non-U.S. exports in the next decade in the face of President Trump’s tariffs and the American leader’s musing that Canada could become “the 51st state.”
▶ Read more about relations between Canada and China
The comment by a Chinese Foreign Ministry spokesperson came in response to a question at a regular daily briefing. President Trump has said he would like to make a deal to acquire Greenland, a semiautonomous region of NATO ally Denmark, to prevent Russia or China from taking it over.
Tensions have grown between Washington, Denmark and Greenland this month as Trump and his administration push the issue and the White House considers a range of options, including military force, to acquire the vast Arctic island.
Danish Prime Minister Mette Frederiksen has warned that an American takeover of Greenland would mark the end of NATO.
▶ Read more about the U.S. and Greenland
Trump said Sunday that he is “inclined” to keep ExxonMobil out of Venezuela after its top executive was skeptical about oil investment efforts in the country after the toppling of former President Nicolás Maduro.
“I didn’t like Exxon’s response,” Trump said to reporters on Air Force One as he departed West Palm Beach, Florida. “They’re playing too cute.”
During a meeting Friday with oil executives, Trump tried to assuage the concerns of the companies and said they would be dealing directly with the U.S., rather than the Venezuelan government.
Some, however, weren’t convinced.
“If we look at the commercial constructs and frameworks in place today in Venezuela, today it’s uninvestable,” said Darren Woods, CEO of ExxonMobil, the largest U.S. oil company.
An ExxonMobil spokesperson did not immediately respond Sunday to a request for comment.
▶ Read more about Trump’s comments on ExxonMobil
Trump’s motorcade took a different route than usual to the airport as he was departing Florida on Sunday due to a “suspicious object,” according to the White House.
The object, which the White House did not describe, was discovered during security sweeps in advance of Trump’s arrival at Palm Beach International Airport.
“A further investigation was warranted and the presidential motorcade route was adjusted accordingly,” White House press secretary Karoline Leavitt said in a statement Sunday.
The president, when asked about the package by reporters, said, “I know nothing about it.”
Anthony Guglielmi, the spokesman for U.S. Secret Service, said the secondary route was taken just as a precaution and that “that is standard protocol.”
▶ Read more about the “suspicious object”
Trump said Iran wants to negotiate with Washington after his threat to strike the Islamic Republic over its bloody crackdown on protesters, a move coming as activists said Monday the death toll in the nationwide demonstrations rose to at least 544.
Iran had no direct reaction to Trump’s comments, which came after the foreign minister of Oman — long an interlocutor between Washington and Tehran — traveled to Iran this weekend. It also remains unclear just what Iran could promise, particularly as Trump has set strict demands over its nuclear program and its ballistic missile arsenal, which Tehran insists is crucial for its national defense.
Iranian Foreign Minister Abbas Araghchi, speaking to foreign diplomats in Tehran, insisted “the situation has come under total control” in fiery remarks that blamed Israel and the U.S. for the violence, without offering evidence.
▶ Read more about the possible negotiations and follow live updates
Fed Chair Powell said Sunday the DOJ has served the central bank with subpoenas and threatened it with a criminal indictment over his testimony this summer about the Fed’s building renovations.
The move represents an unprecedented escalation in Trump’s battle with the Fed, an independent agency he has repeatedly attacked for not cutting its key interest rate as sharply as he prefers. The renewed fight will likely rattle financial markets Monday and could over time escalate borrowing costs for mortgages and other loans.
The subpoenas relate to Powell’s testimony before the Senate Banking Committee in June, the Fed chair said, regarding the Fed’s $2.5 billion renovation of two office buildings, a project that Trump has criticized as excessive.
Powell on Sunday cast off what has up to this point been a restrained approach to Trump’s criticisms and personal insults, which he has mostly ignored. Instead, Powell issued a video statement in which he bluntly characterized the threat of criminal charges as simple “pretexts” to undermine the Fed’s independence when it comes to setting interest rates.
▶ Read more about the subpoenas
President Donald Trump speaks to reporters while in flight on Air Force One to Joint Base Andrews, Md., Sunday, Jan. 11, 2026. (AP Photo/Julia Demaree Nikhinson)
President Donald Trump waves after arriving on Air Force One from Florida, Sunday, Jan. 11, 2026, at Joint Base Andrews, Md. (AP Photo/Julia Demaree Nikhinson)
