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NEW YORK (AP) — U.S. stocks rose Monday ahead of a busy week for central banks around the world that could determine the fate of interest rates.
The S&P 500 added 32.33 points, or 0.6%, to 5,149.42, snapping its first consecutive weekly decline since October. At one point during the day, the stock was on track to surpass last week’s closing high.
The Dow Jones Industrial Average rose $75.66, or 0.2%, to $38,790.43, and the Nasdaq Composite Index rose $130.27, or 0.8%, to $16,103.45.
The highlight for Wall Street this week will be the Federal Reserve’s interest rate meeting, which concludes on Wednesday. There are widespread expectations that the central bank will keep its key interest rate unchanged at the highest level since 2001.
But Fed officials are also expected to release updated projections about where they see interest rates heading this year and over the long term. The government had earlier decided to cut interest rates three times this year to ease pressure on the economy and financial system.
However, recent reports on inflation have consistently been worse than expected. This could force the Fed to reduce the number of interest rate cuts this year.
Such a move would be a big disappointment for Wall Street. Stock prices are already rising on Wall Street, partly due to expectations of lower interest rates. Yields on government bonds in the bond market have also been falling since last fall in response to these expectations, but losses have been mitigated by concerns about persistently high inflation.
Joe Davis, Vanguard’s chief global economist, said the Fed could keep key interest rates near current levels through the rest of the year. The investment giant recently raised its basic outlook for the U.S. economy, predicting no recession in 2024, but also slightly raised its forecast for the underlying trend in inflation.
On the other side of the Pacific, the Bank of Japan is scheduled to announce its latest decision on interest rates on Tuesday. It is keeping interest rates below zero in hopes of improving the economy and inflation. Speculation is growing that Japanese workers’ wages may be rising enough for the Bank of Japan to eventually raise interest rates.
Across the Atlantic, the Bank of England is expected to announce its latest decision on interest rates later this week.
On Wall Street, Nvidia rose 0.7% after paring the initial strong gains that started its annual conference for developers.
Wall Street’s frenzy over artificial intelligence technology has driven the stock prices of Nvidia and other companies so high that critics are calling it a bubble. Nvidia has grown to become the third largest stock on the US stock market.
Other big tech stocks also pushed the S&P 500 higher, ending a three-day losing streak, its longest in more than two months. Alphabet rose 4.6% and Tesla rose 6.3%, narrowing its previous annual loss.
Wall Street’s loser was Hertz Global Holdings, which fell 6.2%, bringing its year-to-date loss to 31.6%. Chairman and CEO Stephen Shah will step down at the end of March. The company has appointed Wayne “Gil” West as CEO. He is a former executive at self-driving car company Cruise and Delta Air Lines.
Wall Street was trading mixed, with small-cap stocks in the Russell 2000 index down 0.7%.
Boeing fell another 1.5%, taking its annual loss to 31%. The company has been plagued by concerns over manufacturing quality, with the latest negative headlines coming on Friday. After the old Boeing 737-800 arrived from San Francisco to its destination in southern Oregon, workers discovered a panel was missing.
In the bond market, the yield on the 10-year U.S. Treasury rose to 4.33% from 4.31% late Friday.
In overseas stock markets, Japan’s Nikkei Stock Average rose 2.7%. Share prices of Nissan Motor and Honda rose after the two companies agreed to collaborate in the field of electric vehicles.
Apart from a 1% rise in Shanghai stocks, movements were much more muted elsewhere in Asia and Europe.
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AP Business Writers Matt Ott and Zimo Zhong contributed.
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