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Wall Street's Momentum Cools After Latest Records

Wall Street's Momentum Cools After Latest Records
New York Stock Exchange floor broker John Santiago (Richard Drew/AP)

Monday, 25 March 2024 04:13 PM EDT

U.S. stocks drifted lower at the start of what will be a shortened trading week. The S&P 500 slipped 0.3% Monday. The Dow Jones Industrial Average gave back 0.4%, and the Nasdaq composite edged down 0.3%.

Boeing rose after the airplane maker announced a management shakeup. The market was cooling after last week’s run, which sent all three indexes to records on Thursday. This week could be relatively quiet, with the headline report on U.S. consumer spending and inflation coming Friday. U.S. markets will be closed that day for Good Friday. Treasury yields rose in the bond market.

The market is easing back from last week’s big run, which was its best of the year and sent all three indexes to records on Thursday. Stocks climbed as the Federal Reserve indicated it’s still likely to deliver several cuts to interest rates this year, as long as inflation keeps cooling.

That has the S&P 500 on track for another winning month in what’s been a nearly unstoppable run since late October. The strength has been durable, “but the longer the market goes up without a notable pullback, the closer we come to such a move taking place,” according to Chris Larkin, managing director, trading and investing at E-Trade from Morgan Stanley.

For the market to continue rallying, more companies will need to deliver strong earnings growth to justify high prices, say strategists at Morgan Stanley.

United Airlines was weighing on the market and lost 4.1%. Federal regulators are increasing their oversight of the company following several recent issues, including a piece of the outer fuselage falling off one jet and a plane losing a tire during takeoff.

Boeing was trimming some of its sharp losses for the year and rose 1.5%. Beset by worries about its safety and quality of manufacturing, the plane maker announced a shakeup to its management. Among the moves is the departure of its CEO, set for the end of the year.

Wall Street is also preparing for the return of a stock trading under the ticker symbol “DJT,” the initials of former President Donald Trump. The company behind his Truth Social platform completed its merger with Digital World Acquisition Corp. after Digital World's shareholders approved the deal on Friday.

The company's stock jumped 34.3% in what's expected to be its last day trading under its ticker symbol of “DWAC.” On Tuesday, it will begin trading under “DJT,” which was used by Trump Hotels & Casino Resorts before it filed for Chapter 11 bankruptcy protection in 2004.

This week’s highlight for financial markets may be Friday’s report on U.S. consumer spending. It will also include the latest update on the measure of inflation that the Federal Reserve prefers to use. But the U.S. stock and bond markets will be closed that day in observance of Good Friday. The U.S. bond market will also close early on Thursday, which could bunch up trades in anticipation of the report.

Despite a string of recent reports that showed inflation remaining hotter than expected, the Federal Reserve seems to expect inflation to continue its longer-term cooling trend.

Traders largely expect the Federal Reserve to begin cutting rates in June. That would offer relief for the economy because the Fed’s main rate has been sitting at its highest level since 2001 for nearly eight months. High rates work to grind down inflation by slowing the entire economy and hurting prices for investments.

In the bond market, Treasury yields were climbing. The 10-year yield rose to 4.25% from 4.20% late Friday.

In stock markets abroad, indexes mostly moved modestly in mixed trading across Europe and Asia.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


StreetTalk
U.S. stocks drifted lower at the start of what will be a shortened trading week. The S&P 500 slipped 0.3% Monday.
stock market, rates, japan, china
603
2024-13-25
Monday, 25 March 2024 04:13 PM
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