Wall Street remained near its record highs on Monday as investors prepared for a week likely focused on updates from the Federal Reserve chair and major U.S. retailers.
The S&P 500 stayed mostly flat after its first loss following three straight days at an all-time high. The Dow Jones Industrial Average was up 22 points, or 0.1%, by early afternoon Eastern time, while the Nasdaq composite showed little change.
Shares of Novo Nordisk, trading in the U.S., rose 5% after the Danish company announced that U.S. regulators approved its Wegovy drug for treating a liver disease common among overweight and obese individuals.
Soho House, a global membership club, jumped 15.1% after revealing a deal where an investor group led by hotel operator MCR would acquire its shares for $9 each in cash.
Meanwhile, some of the largest U.S. retailers showed mixed performance ahead of their upcoming earnings reports. Home Depot, set to report on Tuesday, slipped 0.7%, while Target rose 2.1% ahead of Wednesday’s report, and Walmart gained 0.4% before its Thursday announcement.
These companies, along with Estee Lauder and Ross Stores, are expected to provide insight into how various U.S. households are faring as the labor market shifts. Currently, few workers are being fired or hired, creating a unique economic dynamic.
At the same time, a small group of wealthy households and a handful of Big Tech companies are increasingly dominating the stock market, partly due to a surge in spending on artificial intelligence technology.
This growing gap between the market “haves” and “have nots” could pose risks, with many companies vulnerable if economic growth stalls and inflation remains high, according to Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management. She warns that investors might mistakenly assume broad market gains reflect widespread success, when in reality it’s driven by a select few.
Attention will shift to Jackson Hole, Wyoming, on Friday, where Federal Reserve Chair Jerome Powell is expected to speak. Investors are eager to hear if Powell’s views on interest rates have shifted since his statement last month expressing a desire to delay rate cuts.
At that time, concerns about President Donald Trump’s tariffs pushing inflation higher were prominent. Now, however, worries center on a slowing U.S. job market after a weak employment report shortly following the Fed’s last meeting.
The Fed faces a dual challenge: maintaining a healthy labor market while controlling inflation. Efforts to support one can often negatively impact the other in the short term. Lower interest rates can stimulate the economy by making borrowing cheaper for households and businesses but risk exacerbating inflation.
Recent inflation data has been mixed, adding to the uncertainty. Still, traders widely expect the Fed to reduce its main interest rate for the first time this year at the September meeting, hoping Powell will signal this during his speech.
Expectations of lower rates have recently pushed Treasury yields down, and they mostly stayed steady on Monday. The yield on the 10-year Treasury note ticked slightly higher to 4.34% from 4.33% on Friday.
In international markets, European indexes mostly declined in early trading after President Trump’s inconclusive summit with Russian President Vladimir Putin on Friday regarding the Ukraine conflict. Trump is scheduled to meet later with Ukrainian President Volodymyr Zelenskyy and other European leaders.
In Asia, market performance was mixed: Japan’s Nikkei 225 rose 0.8%, while South Korea’s Kospi fell 1.5%.
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