NEW YORK (AP) — Wall Street is drifting Wednesday, and stocks are mixed a day after their latest tumble in what’s been a messy August.
The S&P 500 was 0.2% higher in early trading, clawing back a bit of its prior day’s loss of 1.2%. The Dow Jones Industrial Average was up 153 points, or 0.4%, at 35,100, as of 9:45 a.m. Eastern time, and the Nasdaq composite was 0.2% lower.
Retailers Target and TJX, the company behind T.J. Maxx and Marshalls, were both pushing upward on the market. Target rallied 4.9%, and TJX rose 2.8% after each reported stronger profit for the spring than analysts expected.
They were working to offset a drop of 4.3% for Brinker International, which runs Chili’s restaurants. It also reported stronger profit than expected, but its revenue fell short of forecasts.
Wall Street has generally been retrenching this month on several concerns, including worries that torrid gains made this year through July were overdone and that interest rates may stay high for longer.
The Federal Reserve may offer more clues about where interest rates are heading in the afternoon, when it releases the minutes from its latest meeting. That’s when the Fed hiked its main interest rate to the highest level in more than two decades in hopes of further smothering high inflation.
Hopes are still high among traders that last month’s rate hike may prove to be the last of this cycle and that the Fed’s next move will be to begin cutting rates early next year. That would offer relief because high rates slow the entire economy bluntly and hurt prices for investments, raising the risk of a recession.
But the Fed has been adamant that it wants to fully extinguish the worst inflation in decades, and a surprisingly strong report on U.S. retail sales Tuesday suggested upward pressure still exists. So while strong economic reports calm long-held worries about a possible recession, they could also end up keeping rates higher for longer than traders expect.
Reports on Wednesday morning showed that U.S. industrial production improved by more than economists expected last month. Homebuilders also broke ground on more homes.
Treasury yields have been generally climbing as reports have painted a picture of a still solid economy. That pressures stocks because when safe bonds are paying more in interest, investors feel less need to pay high prices for stocks and other investments.
But yields pulled back a bit on Wednesday, offering some relief. The yield on the 10-year Treasury fell to 4.20% from 4.22% late Tuesday. It helps set rates for mortgages and other important loans.
The two-year Treasury yield, which more closely tracks expectations for the Fed, fell to 4.93% from 4.96%.
In stock markets abroad, indexes were mixed across Europe. Stocks were down more sharply in Asia, where worries are high about a faltering economic recovery in China.
Stocks fell 1.4% in Hong Kong, 1.8% in Seoul, 1.5% in Tokyo and 0.8% in Shanghai.
Coming into this year, the expectation was that China’s economy would grow enough after the government removed anti-COVID restrictions to prop up a global economy weakened by high inflation. But China’s recovery has faltered so much that it unexpectedly cut a key interest rate on Tuesday and skipped a report on how many of its younger workers are unemployed.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
