Until then, profit reports from overnight and the morning were the main drivers of Tuesday’s action.
PayPal jumped 6.9% after saying it made a bigger profit during the summer than analysts expected. It also said it plans to pay its shareholders a dividend every three months, while announcing a deal where internet users will be able to pay for purchases through OpenAI’s ChatGPT.
On the losing end of Wall Street was Royal Caribbean, which lost 8.7% despite reporting a stronger profit than analysts expected. Its revenue for the latest quarter fell short of expectations. The cruise operator also said it’s seen a “minimal” hit to its business this quarter because of bad weather, along with the temporary closure of one of its exclusive destinations in Haiti.
A slowing job market is one of the main reasons Wall Street is expecting the Fed will announce another cut to interest rates on Wednesday. If it does, it would be the second time this year where it’s lowered the federal funds rate in hopes of helping the job market.
The widespread expectation is that the Fed will cut rates for a third time at its final meeting of the year. A lot is riding on that, in part because U.S. stock prices have already rallied to records on expectations for it. That’s why the most important part of Wednesday’s announcement for Wall Street will be whether Fed Chair Jerome Powell gives any hints about upcoming moves.
Fed officials have indicated that they’re likely to keep cutting interest rates into next year, but they may have to change course if inflation accelerates beyond its still-high level. That’s because low interest rates can make inflation worse.
In the bond market, the yield on the 10-year Treasury eased to 3.98% from 4.01% late Monday. A report showing confidence among U.S. consumers is a smidgen better than economists expected had little effect on the market.
In stock markets abroad, indexes were mixed in Europe following modest losses in Asia.
Japan’s Nikkei 225 fell 0.6% from its record high. South Korea’s Kospi sank 0.8% for another one of the world’s larger moves.
Some of the strongest action in financial markets was again for the price of gold. It’s been struggling after an astonishing run this year, setting records and nearly reaching $4,400 per ounce last week. It’s since dropped below $4,000 per ounce, and its gain for the year so far has trimmed to roughly 50%.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
