Wall Street rises to a record after a small gain for the S&P 500
NEW YORK — U.S. stocks crept to a record as the S&P 500 nudged higher after a quiet Tuesday of trading.
The main measure of Wall Street’s health rose 0.2% to finish just above its all-time closing high, set last month. Most of the stocks within the index rose as it danced around the milestone through the day.
The Dow Jones industrial average added less than 0.1%, while the Nasdaq composite rose 0.1%.
Entergy helped lead the way after rallying 6%. The electric company, which serves customers in Arkansas, Louisiana, Mississippi and Texas, reported stronger profit for the latest quarter than analysts expected.
That helped offset a 5.5% drop for Conagra Brands, which lowered its forecasts for upcoming profit and other financial measures. The food company said supply issues have hurt two of its product lines: frozen meals containing chicken and frozen vegetables. It also said shifting values of foreign currencies are hurting its profits.
Meta Platforms weighed on the market after falling 2.8%. It was the first drop for the parent of Facebook and Instagram since Jan. 16, and it had leaped more than 20% over that 20-day winning streak.
U.S. stocks have climbed back to record heights thanks in large part to stronger-than-expected profit reports, even after big disruptions recently seemed set to derail Wall Street’s long, upward trend that began in 2022.
Hanging over everything has been the threat of a punishing global trade war after President Trump’s tariff announcements. But Wall Street has been taking such actions increasingly in stride, believing that they are merely tools for negotiations and that they’ll ultimately prove to be less painful for markets and the economy than they may seem initially.
Then there’s DeepSeek, the Chinese artificial intelligence startup that said it was able to match the performance of big U.S. rivals without having to use top-of-the-line chips. That raised worries about a pullback in AI investment, which has been a central reason for the market’s stellar gains in recent years.
But big U.S. companies have since said in recent weeks that they still plan to invest billions of dollars in AI, even with DeepSeek’s disruption.
Such optimism has global fund managers feeling so confident that they’re piling into stocks and holding only 3.5% of their portfolios in the safety of cash, according to a survey by Bank of America. That’s the lowest since 2010, strategist Michael Hartnett said in a BofA Global Research report.
Helping to support the fervor has been strong profit reports from Entergy and other big U.S. businesses. Companies in the S&P 500 are on track to deliver nearly 17% growth in their earnings per share for the final three months of 2024, compared with a year earlier. That would be the best growth since 2021, according to FactSet.
Still, threats continue to hang over the stock market. Last week, two reports showed inflation unexpectedly worsened across the United States last month. Such stubborn inflation may force a halt to the Federal Reserve’s cuts to interest rates, which began in September in order to take pressure off the economy and help the job market.
Traders have been paring their expectations for possible rate cuts through 2025, with a notable number saying they foresee no cuts at all. That in turn has pushed up Treasury bond yields, which typically drag downward on prices for stocks and other investments.
Treasury yields rose again Tuesday, with the yield on the 10-year Treasury rising to 4.55% from 4.48% late Friday. Like the U.S. stock market, bond trading was closed Monday in observance of the Presidents Day holiday.
With Treasury yields no longer helping stock prices, Morgan Stanley strategist Michael Wilson suggests that winning stocks and industries could separate themselves even if the overall market looks restrained. He points to areas of the market seeing stronger earnings momentum, such as financial companies.
All told, the S&P 500 rose 14.95 points to 6,129.58. The Dow inched up 10.26 points to 44,556.34, and the Nasdaq composite gained 14.49 points, closing at 20,041.26.
In stock markets abroad, indexes rose modestly across much of Europe and Asia.
Stocks in Hong Kong jumped 1.6% for one of the world’s bigger gains after Chinese President Xi Jinping met with entrepreneurs Monday, including Alibaba founder Jack Ma, in a signal of assurance after a crackdown on the technology industry in recent years.
