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NEW YORK (AP) — Stocks are rising Monday ahead of a busy week for central banks around the world that could determine the fate of interest rates.
The S&P 500 rose 0.9% in early trading, marking its first consecutive weekly decline since October. It is close to the all-time high reached early last week. As usual, Nvidia and other big tech stocks are leading the way.
As of 9:40 a.m. ET, the Dow Jones Industrial Average was up 80 points, or 0.2%, and the Nasdaq Composite was up 1.6%.
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 for 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. That could force the Fed to say it won’t cut rates much 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.
Across the Pacific, the Bank of Japan is also expected to announce its latest decision on interest rates on Tuesday. It has kept its policy interest rate below zero in hopes of controlling the economy and inflation, and has not changed it in 17 years.
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 4.8% as it began its annual conference for developers. Analysts say NVIDIA is widely expected to unveil its next-generation artificial intelligence architecture as AI use cases expand.
Nvidia CEO Jensen Huang will give a keynote address after the day’s close on Wall Street and will hold a Q&A with financial analysts on Tuesday morning.
The excitement around AI technology on Wall Street 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. On Monday, Nvidia was again the strongest force pushing the S&P 500 higher.
Wall Street’s loser was Hertz Global Holdings, which fell 7%, taking its year-to-date loss to 43%. 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.
In the bond market, the 10-year U.S. Treasury yield was flat at 4.31% as of 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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