Wall Street is rising toward more records on Monday at the start of a week that could show whether the U.S. stock market’s big recent rally has been overdone or prescient.
Stocks have already run to records on the assumption that a cut is coming on Wednesday, though. Expectations are also high that the Fed will keep lowering rates through the end of this year and into 2026. That creates the possibility for disappointment in the market, which would mean drops for stock prices, if the Fed doesn’t end up slashing rates as aggressively as traders expect.
That’s why more attention will be on what Fed Chair Jerome Powell says in his press conference following the decision than on the decision itself. Fed officials will also release their latest projections for where they see interest rates and the economy heading in upcoming years, which could provide another potential flashpoint.
Another threat for Wall Street is if the job market slows too much. In that case, a resulting recession could create a downturn in corporate profits that’s big enough to swamp the benefits that lower interest rates bring in the near term.
“‘Too Late’ must cut interest rates now, and bigger than he had in mind,” Trump wrote on his social media network Monday, using his trademark all-caps style.
On Wall Street, TKO Group climbed 2.5% after the owner of the UFC mixed-martial arts organization and other entertainment brands announced a plan for $1 billion in purchases of its stock. Such moves send cash directly to shareholders and can boost per-share results.
On the losing side of Wall Street was Hain Celestial, which fell 26.5% after reporting a larger loss for its latest quarter than it did a year earlier. Interim CEO Alison Lewis said the owner of “better-for-you” brands like Terra chips is making moves to stabilize sales “as we recognize our performance has not met expectations.”
In the bond market Treasury yields eased, continuing their downward run on expectations for cuts to rates by the Fed.
The latest discouraging data on the economy came Monday from a report showing manufacturing activity in New York state is shrinking, contrary to economists’ expectations for continued growth. It’s the first month of contraction since June.
The next big economic update will arrive Tuesday, when the U.S. government will say how much shoppers spent at U.S. retailers last month.
The yield on the 10-year Treasury fell to 4.04% from 4.06% late Friday.
In stock markets abroad, France’s CAC 40 climbed 0.9%, while indexes moved more modestly across the rest of Europe and Asia.
AP Writers Yuri Kageyama, Matt Ott and Ken Moritsugu contributed.
