Some companies that have to buy steel in their manufacturing were swinging, but less sharply. General Motors fell 1.5 per cent, Ford Motor lost 0.3 per cent and Caterpillar slipped 0.4 per cent.
In the meantime, earnings reports from big US companies are also helping to drive trading.
McDonald’s climbed 4.1 per cent even though it reported profit and revenue for the end of 2024 that was just shy of analysts’ expectations. Investors focused instead on better-than-expected strength for its restaurants outside the United States, particularly in the Middle East, Japan and other markets with licensed McDonald’s locations.
Big Tech stocks were some of the strongest forces pushing the S&P 500 higher, including gains of 2.5 per cent for Nvidia and 4.1 per cent for Broadcom. They had come under pressure last month after a Chinese upstart upended Wall Street’s artificial-intelligence boom by saying it had developed a large language model that could perform like the world’s best without having to use the most expensive, top-flight chips.
Despite the development by DeepSeek, big US companies have said in recent weeks that they’re still planning to plow billions of dollars into their AI endeavours. That’s calmed worries that DeepSeek could have turned off a huge spigot of spending for the industry, at least for now.
Such gains helped offset a 5.2 per cent drop for Incyte after the biopharmaceutical company reported weaker profit for the latest quarter than analysts expected.
In the bond market, the yield on the 10-year Treasury eased to 4.48 per cent from 4.50 per cent late Friday. The yield on the two-year Treasury, which more closely tracks expectations for what the Federal Reserve will do with short-term interest rates, fell more. It eased to 4.25 per cent from 4.29 per cent.
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The Fed cut its main interest rate several times through the end of last year, but traders have been sharply curtailing their expectations for more reductions in 2025, in part because of fears about potentially higher inflation from tariffs. While lower rates can give a boost to the economy and investment prices, they can also give inflation more fuel.
Fed Chair Jerome Powell will be offering testimony before Congress later this week, where he could offer more hints about what the Fed is thinking. In December, Fed officials sent financial markets sharply lower after indicating they may cut rates only twice this year. Now, some traders and economists think the Fed may not cut at all.
Reports are also coming this week on inflation, which could further drive the Fed’s actions. On Wednesday, economists expect a report to show prices for eggs, gasoline and other living costs for US consumers were overall 2.9 per cent higher in January than a year earlier.
In stock markets abroad, indexes rose across much of Europe and Asia.
Tokyo’s Nikkei 225 was virtually unchanged after Japan’s government reported a record current account surplus last year.
AP
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