Wall Street Inches Higher as Fed Decision Looms. Image: AP photo
Stocks edged up on Monday as Wall Street braced for a pivotal week. Investors are waiting for key data on jobs and inflation that could shape the Federal Reserve’s next interest rate move.
The market showed modest gains, with the S\&P 500 closing just below last week’s record. The Dow Jones rose 114 points, and the Nasdaq climbed to a fresh all-time high.
Big Tech and New Entrants Drive Momentum
AppLovin and Robinhood stole the spotlight after news they will soon join the S\&P 500 index. Both stocks surged, with Robinhood jumping nearly 16% and AppLovin climbing more than 11%.
Joining the benchmark index is a big deal. Many investment funds mirror the S\&P 500, meaning these companies could quickly attract more investors.
Emcor Group also secured a spot in the index but slipped slightly in trading. They will replace MarketAxess Holdings, Caesars Entertainment, and Enphase Energy, which have been downgraded to the SmallCap 600.
EchoStar Soars on SpaceX Deal
EchoStar shares surged nearly 20% after announcing a \$17 billion deal with Elon Musk’s SpaceX. The agreement includes spectrum licenses and about \$2 billion in debt interest payments.
The move strengthens SpaceX’s Starlink business, particularly its direct-to-cell service. But the deal rattled telecom giants, with Verizon and AT\&T both sliding more than 2%.
Banking Moves Spark Reactions
PNC Financial Services dipped 0.3% after revealing plans to acquire Colorado-based FirstBank for \$4.1 billion. The deal highlights ongoing consolidation in the banking sector, though investors seemed cautious.
Wall Street Traders Eye the Fed
Wall Street’s quiet tone reflects a bigger question: Will the Fed cut rates? Most traders expect a cut at the central bank’s meeting next week, which would be the first this year.
Rate cuts typically excite investors because they can stimulate growth and lift asset prices. But they also risk fueling inflation.
The Fed has so far been more concerned about tariffs imposed by President Donald Trump and their inflationary pressure. Yet recent data showing a cooling job market could sway its stance.
Key Data Ahead
Markets are watching three big reports this week.
Tuesday: The government releases revisions to job growth figures through March. Hiring may have been weaker than first reported.
Wednesday and Thursday: Fresh updates on wholesale and consumer inflation will reveal how prices moved last month.
These numbers could complicate the Fed’s decision. Supporting the job market with lower rates could worsen inflation, while fighting inflation could slow hiring further.
Companies Brace for Tariff Impact
Tariffs have pushed up costs for many industries. Some manufacturers say they can pass higher prices to customers. Retailers selling nonessential goods, however, are leaning on inventory stockpiles, delaying the impact for households.
Morgan Stanley analysts noted that companies remain cautious about margins as uncertainty continues.
Bonds and Global Markets
Treasury yields eased, signaling confidence in a likely Fed rate cut. The 10-year yield fell to 4.04% from 4.10% on Friday, continuing its downward trend.
Overseas, markets showed strength. European and Asian indexes mostly gained, with Japan’s Nikkei 225 jumping 1.5%.
The rally came after Prime Minister Shigeru Ishiba confirmed plans to step down. His resignation was widely expected and sets up a leadership election in the ruling party.
Japan also reported stronger economic growth. Revised data showed the economy expanded at a 2.2% annualized rate in the first quarter, double the previous estimate. Consumer spending and inventories provided the lift.
The Outlook
Investors are now in wait-and-see mode. Every market move circles back to the Fed’s next step. If inflation cools and job weakness deepens, a rate cut could be almost certain.
For now, Wall Street remains cautiously optimistic, keeping one eye on data and the other on Washington.
