Stock market today: Wall Street heads toward gains as markets try to finish the month strong

By ELAINE KURTENBACH and MATT OTT
AP Business Writers

Wall Street pointed toward gains Friday ahead of closely-watched inflation data that could impact the Federal Reserve’s next interest rate decision.

Futures for the Dow Jones Industrial Average rose 0.3% before the bell and the S&P 500 gained 0.4%.

The government’s consumer spending report that will be released before the opening bell contains a measure of inflation that is closely watched by the Fed, which has been raising rates furiously for more than a year in an effort to bring down inflation not seen since the early 1980s.

Analysts forecast that inflation retreated from the previous month, which had come in higher than expected. Measured year over year, prices increased 4.4% in April, up from 4.2% in March. That’s down sharply from a 7% peak last June but remains far above the Fed’s 2% target.

Before the Fed’s most recent meeting in June when officials declined to bump up rates, the central bank had raised its benchmark borrowing rate 10 times in the past 15 months in its campaign to stifle inflation. The Fed’s mission includes cooling the economy and the job market, which has proven more difficult than expected.

On Thursday, most stocks climbed on Wall Street following the latest signs that the U.S. economy remains stronger than feared.

Yields jumped in the bond market after data showed the U.S. economy grew at a 2% annual rate in the first three months of the year, much stronger than the 1.3% rate earlier estimated. Another report said fewer workers applied for unemployment benefits last week than expected, a sign that the job market remains remarkably solid despite much higher interest rates meant to slow the overall economy.

That raises questions over whether a long-forecast recession is inevitable. And such resilience could lead the Federal Reserve to see the economy as strong enough to keep hiking interest rates to drive down inflation.

High rates slow inflation by dragging on the entire economy, and they have already hurt the manufacturing, technology, banking and housing sectors.

In Asia, China reported slower factory activity in June due to weaker consumer spending and export demand, adding to signs that an economic rebound following the end of anti-virus controls is cooling.

China’s economy revived following the end in December of pandemic controls on travel and business activity. But that revival has faded due to lackluster consumer spending at home and weak demand for exports following interest rate hikes in the United States and Europe to cool inflation.

The Shanghai Composite index jumped 0.6% to 3,206.06 and Hong Kong’s Hang Seng edged 0.1% higher, to 18,949.70. The Nikkei 225 in Tokyo shed 0.1% to 33,189.04.

In Australia, the S&P/ASX 200 edged 0.1% higher to 7,203.30, while the Kospi in Seoul picked up 0.6% to 2,564.28. Shares fell in Taiwan but advanced in Bangkok and Mumbai.

Germany’s DAX and the CAC 40 in Paris each climbed 1.1% by midday, while Britain’s FTSE 100 rose 0.7%.

In other trading Friday, the dollar slipped to 144.63 Japanese yen from 144.77 yen. The euro inched back to $1.0866 from $1.0867.

U.S. benchmark crude oil added 2 cents to $69.88 per barrel in electronic trading on the New York Mercantile Exchange. It gained 30 cents on Thursday to $69.86 per barrel.

Brent crude oil, the international pricing standard, rose 9 cents to $74.60 per barrel.

The S&P 500 rose 0.4% and is on track for its sixth winning week in the last seven. The Dow Jones Industrial Average gained 0.8% and the Nasdaq composite edged down less than 0.1%.

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Kurtenbach reported from Bangkok; Ott reported from Silver Spring, Md.