Stock market today: Wall Street drifts around its record heights

NEW YORK (AP) — U.S. stocks are drifting around their records Wednesday as financial markets around the world take a pause following big recent moves.

The S&P 500 was 0.1% higher in early trading, a day after setting an all-time high for the 41st time this year. The Dow Jones Industrial Average was up 5 points, or less than 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.2% higher.

Treasury yields were also holding relatively steady in the bond market, a day after sinking on a surprisingly weak update on confidence among U.S. consumers. The worst drop in confidence in three years raised worries about the U.S. economy, but it also raised expectations that the Federal Reserve will deliver another dose of bigger-than-usual relief through a big cut to interest rates at its next meeting.

In stock markets abroad, indexes moved more modestly after jumping a day before on hopes that new stimulus measures from China would prop up the world’s second-largest economy. Chinese indexes rose again Tuesday, but they pared their gains as the day progressed, while European indexes were modestly lower. Prices for crude oil also gave back gains.

The next date on the calendar circled for a potentially big market move is next week, when the latest monthly update on the U.S. job market will arrive. Slowing hiring in the world’s largest economy has become the top concern among investors, now that inflation has eased significantly from its peak two summers ago.

While the number of layoffs remains relatively low, U.S. employers are also more hesitant to hire. Critics worry the job market could weaken further as all the past hikes to interest rates made by the Federal Reserve make their way fully through the system.

The Fed kept its main interest rate at a two-decade high for more than a year in hopes of slowing the U.S. economy enough to stifle inflation. Last week, it swung its focus toward protecting the job market and cut the federal funds rate by a larger-than-usual half of a percentage point. Critics say it may be moving too late.

A strong job market would help Cintas, which provides uniforms, fire extinguishers and other products to businesses. It rose 1.1% after reporting stronger profit for the latest quarter than analysts expected. Cintas also increased its forecasts for profit and revenue over the full fiscal year.

On the losing end of Wall Street was Stitch Fix, which tumbled 34.5% after the online fashion styling service said its revenue in the current quarter could be 15% to 17% weaker than a year earlier. Its stock has dropped below $3 from $100 early in the pandemic.

KB Home fell 5.8% after reporting profit for the latest quarter that was just shy of analysts’ expectations. The homebuilder, though, said orders picked up in August as mortgage rates came down.

Besides lowering mortgage rates, rate cuts by the Fed could also make it more affordable to get loans for a car or to buy things on credit cards and give the economy a boost.

While everyone on Wall Street is already convinced the Federal Reserve will cut the federal funds rate at its next meeting in November, a slight majority of bets are on the Fed cutting by another half of a percentage point, according to data from CME Group. It usually moves rates by a quarter of a percentage point at a time.

In the bond market, the yield on the 10-year Treasury rose to 3.76% from 3.73% late Tuesday. The two-year yield, which moves more closely with expectations for the Fed, fell to 3.53% from 3.54%.

In stock markets abroad, indexes rose 1.2% in Shanghai, fell 1.3% in South Korea and slipped 0.1% in London.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

Stan Choe, The Associated Press