Stock market today: Wall Street holds steady following its best week of the year

NEW YORK -- U.S. stocks are holding relatively steady Monday as Wall Street’s roller coaster of a summer levels out a bit.

The S&P 500 was 0.2% higher in early trading, coming off its best week of the year. The Dow Jones Industrial Average was up 125 points, or 0.3%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.1% higher.

Among the biggest movers in the mostly quiet market was Ulta Beauty, which has been rallying since famed investor Warren Buffett’s company, Berkshire Hathaway, revealed last week it had built a stake in the retailer. Ulta climbed another 2.5%.

Chip company Advanced Micro Devices inched up 0.4% after saying it would buy ZT Systems, a supplier in the cloud computing and artificial-intelligence industries, in a cash-and-stock deal valued at $4.9 billion.

That helped offset a 2.1% loss for Estee Lauder, which fell even though it reported stronger profit for the latest quarter than analysts expected. It warned it expects more declines in sales among Chinese shoppers in its upcoming fiscal year. The world’s second-largest economy has been disappointing investors worldwide.

Trading was relatively quiet elsewhere, including in the bond market. Treasury yields were holding firm ahead of what’s likely to be financial markets’ main event for the week: a speech on Friday by Federal Reserve Chair Jerome Powell.

The setting for the speech in Jackson Hole, Wyoming, has been home to some big policy announcements by the Fed in the past. Expectations aren’t that high this time around, with nearly everyone already expecting the Fed to begin cutting interest rates next month.

That would be the first such cut since the Fed began hiking interest rates drastically in early 2022, hoping to slow the economy by enough to stifle inflation but not to cause a recession. With inflation slowing from its peak above 9% two summers ago, Fed officials have already hinted cuts to rates are coming. The biggest question is whether the economy just needs the Federal Reserve to remove the brakes or if it needs more help and deeper cuts.

A surprisingly weak report on hiring last month by U.S. employers raised worries the Fed has already kept interest rates too high for too long. Such worries combined with concerns that investors took the prices of Nvidia and other highly influential Big Tech stocks too high in their frenzy around artificial-intelligence technology, along with other factors, to send markets globally through a scary couple weeks. That included the worst day for Japan’s market since the Black Monday crash of 1987.

But an ensuing assurance from the Bank of Japan on interest rates there has helped calm the market. Several recent reports on the U.S. economy have also come in stronger than expected, covering everything from inflation to sales at U.S. retailers, which bolstered optimism.

This upcoming week won’t have as many economic reports on the schedule. An updates on weekly jobless claims on Thursday or a preliminary report on U.S. business activity the same day could be the highlights of the week.

More action will likely come from earnings reports as the reporting season for the spring winds down. Most companies have turned in better profits for the latest quarter than analysts expected, as is usually the case.

With more than 90% of companies in the S&P 500 having already turned in their reports, they’re on track to deliver growth of nearly 11% in earnings per share from a year earlier, according to FactSet. That would be the best growth since the end of 2021

Retailers dominate the tail end of earnings season, and Lowe’s, Ross Stores, Target and TJX will be among those in the spotlight this week. A report on Friday suggested U.S consumers are feeling better about the economy than expected, but worries have been high about how much they can continue spending. Those at the lower end of the income spectrum appear to be under particular pressure, with prices still high across the economy despite inflation’s slowdown.

In the bond market, the yield on the 10-year Treasury inched up to 3.89% from 3.88% late Friday.

In stock markets abroad, Japan’s Nikkei 225 dropped 1.8%. It was hurt by a rise in the Japanese yen’s value against the U.S. dollar. Such moves can erode profits for Japanese exporters, and big swings in the yen’s value following a recent hike to interest rates by the Bank of Japan was a big factor in markets’ turmoil earlier this month.

It forced hedge funds around the world to abandon a popular trade en masse, where they had borrowed Japanese yen at cheap rates to invest elsewhere.

On Monday, though, movements in other stock markets outside Tokyo were calmer, with European indexes modestly higher and Asian indexes mixed.