NEW YORK — Stocks are holding relatively steady Wednesday, as Wall Street waits for a highly anticipated report on inflation that’s arriving the next day.
The S&P 500 was 0.1% lower in early trading, coming off a rough run where it’s dropped in five of the last six days. The Dow Jones Industrial Average was up 5 points, or less than 0.1%, at 35,319, as of 9:47 a.m. Eastern time, and the Nasdaq composite was 0.4% lower.
Stocks have cooled a bit in August since soaring 19.5% through the first seven months of the year. Several reasons are behind the mini-pullback, including criticism that Wall Street too quickly formed a consensus that inflation will keep cooling, the economy will keep growing and the Federal Reserve has already finished its hikes to interest rates.
A report on Thursday will offer a big clue on how warranted those hopes are. The U.S. government will give the latest monthly update on inflation that consumers are feeling across the country, and economists expect to see an acceleration to 3.3% in July from 3% in June. That’s still down sharply from its peak of more than 9% last summer, but economists say the last bit of improvement to get inflation down to the Fed’s 2% target may be the toughest part.
A reading that’s much worse than expected could raise fears that the Fed’s job in battling inflation is far from done and that it may have to keep hiking interest rates. Higher rates slow inflation by grinding down the entire economy and hurting investment prices. The Fed has already pulled its federal funds rate to the highest level in more than two decades.
In the meantime, companies continue to offer profit reports for the spring that are mostly better than analysts expected.
Axon Enterprise, the company behind Tasers and Axon body cameras, jumped 16% for one of the biggest gains in the S&P 500. It reported much stronger profit for the spring than analysts expected. Akamai Technologies also helped to lead the market after beating forecasts for both profit and revenue. It rose 9.5%.
On the losing end was Lyft, which skidded 7.1%. The ride-share company reported better results for the latest quarter than expected, and its forecasts for the current quarter also topped forecasts. But analysts highlighted some cautious comments from the company for expectations for the end of the year.
Outside of earnings, Penn Entertainment jumped 12% after the gaming company announced Tuesday that it was paying $1.5 billion for the exclusive rights to re-brand its sports-betting app with the ESPN name. Penn will operate ESPN Bet, which Disney-owned ESPN has agreed to promote across its online and broadcast platforms.
WeWork plunged 25.3% to 16 cents after it said there’s substantial doubt about its ability to stay in business, as it burns through cash. The workspace-sharing company has already had a couple spectacular rises and falls in its history, and it reported a larger loss than expected for the spring late Tuesday.
In the bond market, the yield on the 10-year Treasury slipped to 4.00% from 4.03% late Tuesday. It helps set rates for mortgages and other loans.
The two-year Treasury yield, which moves more on expectations for action by the Fed, dipped to 4.75% from 4.76%.
In stock markets abroad, indexes were modestly higher in Europe and mixed in Asia. A report showed that prices at the consumer level in China are lower than a year earlier. It’s the latest evidence of sputters for the world’s second-largest economy.
China was supposed to help prop up the global economy after it removed anti-COVID restrictions, but it’s fallen short of expectations. The weakness, though, has also kept some pressure off inflation around the rest of the world.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
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