Federal Budget

Stocks edge higher on Wall Street, adding to gains for May

Stocks edge higher on Wall Street, adding to gains for May

Business

Stocks edge higher on Wall Street, adding to gains for May

Follow on
Follow us on Google News

NEW YORK (AP) — Stocks edged higher in morning trading on Wall Street Tuesday, putting the market a bit closer to the record high it set in late March.

The S&P 500 rose 0.2% and is within about 0.5% of its record set in late March. The Dow Jones Industrial Average rose 52 points, or 0.1% to 39,483 as of 11:17 a.m. Eastern. The Nasdaq composite rose 0.5%.

Several “meme” stocks were racing higher again including GameStop and AMC Entertainment in a reprise of the social-media driven frenzy of three years ago. GameStop jumped 71.9% and AMC surged 87.5%.

An update on inflation showed that prices remain stubbornly high at the wholesale level, before many price changes are passed along to consumers. The latest producer price index showed that inflation rose sharply in April. The report also included a revision lower for the March reading. The report is the first of two big inflation updates this week that are being closely watched by Wall Street.

“Inflation pressures in the U.S economy are still substantial and the momentum that built up over the last few years is still rolling along,” said by Bill Adams, chief economist for Comerica Bank. “At the margin the Fed will see the April PPI report as another reason to slow-roll interest rate cuts.”

Investors have been curtailing their expectations for the speed and frequency of interest rate cuts this year as inflation remains hotter than expected. Traders are betting on one or two rate cuts this year, according to data from CME Group.

Wall Street is still hoping the Fed can pull off its “soft landing,” where high interest rates work to cool inflation without slowing the economy into a recession. The economy remains strong, but consumers might be showing signs of fatigue under the weight of stubborn inflation. Economists expect a retail sales report on Wednesday to show that consumer spending softened in April, just as it has over the last several months.

The latest round of earnings reports and company forecasts from retailers also show that consumers are struggling. Lower-income households are under a particularly heavy strain.

Fed Chair Jerome Powell has said that the central bank’s next move, though, isn’t likely to be a rate increase, despite stubborn inflation.

Earnings have been a bright spot for markets, helping to support gains for major indexes in May after a rough April. Companies in the S&P 500 are mostly finished with their latest results, which show a 5.3% gain in earnings overall.

Stocks were mostly higher in Europe and Asia.

Chinese markets slipped following U.S. plans to raise tariffs on imports from China.