Financial Markets                      09/16 09:54

   

   NEW YORK (AP) -- U.S. stocks are hanging around their record heights on 
Tuesday as the countdown ticks toward what Wall Street expects will be the 
first cut of the year to interest rates by the Federal Reserve.

   The S&P 500 edged down by 0.1%, coming off its latest all-time high. The Dow 
Jones Industrial Average was down 131 points, or 0.3%, as of 10:15 a.m. Eastern 
time, and the Nasdaq composite was virtually unchanged.

   Stocks have run to records on expectations that the Fed will announce the 
first of a series of cuts to rates on Wednesday afternoon in hopes of giving 
the economy a boost. The job market has slowed so much that traders believe Fed 
officials now see it as the bigger danger for the economy than the threat of 
higher inflation because of President Donald Trump's tariffs.

   The Fed has been holding off on cuts to rates because inflation has remained 
above its 2% target, and easier interest rates could give it more fuel.

   A report on Tuesday said shoppers increased their spending at U.S. retailers 
by more last month than economists expected. A chunk of that could simply be 
due to shoppers having to pay higher prices for the same amount of stuff. But 
it could also indicate solid spending by U.S. households could continue to keep 
the economy out of a recession.

   The data did little to change traders' expectations for a cut to interest 
rates on Wednesday, followed by more through the end of the year and into 2026.

   Such high expectations have sent stocks to records, but they can also create 
disappointment if unfulfilled. That's why more attention will be on what Fed 
Chair Jerome Powell says in his press conference following Wednesday's decision 
than on the decision itself. Fed officials will also release their latest 
projections for where they see interest rates and the economy heading in 
upcoming years, which could provide another potential flashpoint.

   For now, global fund managers are tilting their portfolios toward stocks at 
the highest level in seven months, according to the latest survey by Bank of 
America. That's even though a record 58% of them are also saying that stocks 
look too expensive at the moment.

   On Wall Street, Oracle rose 2.9% on speculation that it could be part of a 
deal that would keep TikTok operating in the United States.

   Steel Dynamics was another winner and climbed 5.1% after it said it's seeing 
improved earnings across its three business units. It credited strong demand 
for steel from the non-residential construction and auto industries, among 
other things.

   Chipotle Mexican Grill added 1.2% after its board said the company could buy 
back an additional $500 million of its stock. Such a move can send cash 
directly to investors and boost per-share results.

   On the losing end of Wall Street was the Dave & Buster's entertainment 
chain, which fell 16.9% after it reported a weaker profit for the latest 
quarter than analysts expected.

   Ralph Lauren sank 2% and got a tepid reception to the unveiling of its 
long-term financial plan, which it titled "Next Great Chapter: Drive." As part 
of it, the company said it expects compounded annual growth over the next three 
years for revenue to be in the mid-single digit percentages.

   New York Times Co. fell 2.9% after Trump filed a $15 billion defamation 
lawsuit against the newspaper and four of its journalists on Monday. The 
lawsuit points to several articles and a book written by Times journalists and 
published in the lead up to the 2024 election as "part of a decades-long 
pattern by the New York Times of intentional and malicious defamation against 
President Trump."

   In stock markets abroad, indexes fell in Europe following a mixed showing in 
Asia.

   Japan's Nikkei 225 added 0.3% to finish at another record. The rally comes 
despite political uncertainty after Japanese Prime Minister Shigeru Ishiba said 
he is stepping down. An election within the ruling Liberal Democratic Party to 
pick a new leader is expected Oct. 4.

   In the bond market, the yield on the 10-year Treasury eased to 4.03% from 
4.05% late Monday.

   ___

   AP Business Writers Yuri Kageyama and Matt Ott contributed.

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