Stocks closed higher on Wall Street on Monday after swaying between small gains and losses much of the day as investors brace for another big interest rate increase this week from the Federal Reserve. The S&P 500 rose 26.56 points, or 0.7%, to 3,899.89. The Dow Jones Industrial Average rose 197.26 points, or 0.6%, to 31,019.68. The Nasdaq rose 86.62 points, or 0.8%, to 11,535.02. Treasury yields moved higher. Markets were looking ahead to Wednesday, when the Federal Reserve will announce its latest decision on rates. It’s expected to raise its benchmark rate, which influences interest rates throughout the economy, another three-quarters of a percentage point in its fight against inflation.
Technology stocks, retailers, and banks gained helped lift the market, the AP reports. Apple rose 2.5%, Home Depot rose 1.7% and Bank of America rose 1.7%. Health care stocks slipped and tempered gains elsewhere in the market. Pfizer fell 1.3%. The broader market is coming off of its worst week in three months following a surprisingly hot report on inflation and big companies, including FedEx, warning about worsening trends in the economy. Wall Street remains focused on inflation and the Federal Reserve's attempt to lower prices by aggressively raising interest rates.
Wall Street has been worried that the Fed's plan to cool the hottest inflation in four decades could be too aggressive and throw the economy into a recession by pumping the brakes on growth too hard. The higher rates also tend to weigh on stocks, especially the pricier technology sector. Investors will get another update on the housing sector on Wednesday when the National Association of Realtors releases August figures for sales of previously occupied homes. Average long-term US mortgage rates climbed above 6% last week for the first time since the housing crash of 2008. The higher rates could make an already tight housing market even more expensive for American homebuyers.
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