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Stock market today: Wall Street drifts after French market jumps on election results

by STAN CHOE AP Business Writer
| July 1, 2024 12:00 AM

NEW YORK (AP) — U.S. stocks are drifting Monday after the French market rallied, as elections continue to drive swings in financial markets worldwide.

The S&P 500 was virtually unchanged in midday trading as it kicked off a shortened, four-day week that includes the Fourth of July holiday. The Dow Jones Industrial Average was up 33 points, or 0.1%, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 0.3% higher.

Some of the world's strongest action was across the Atlantic, where the CAC 40 index in Paris jumped as much as 2.8% before settling to a gain of 1.5%. Results from France suggested a far-right political party may not win a decisive majority in the country's legislative elections. That opens the door for France to avoid a worst-case scenario for financial markets, where such a victory could yield policies that would greatly increase the French government's debt and other challenges.

This is a big year for elections worldwide, with voters heading to the polls in the United Kingdom later this week and soon elsewhere. In the United States, pollsters are measuring the fallout from last week's debate between President Joe Biden and former President Donald Trump. It all underscores "political polarisation and how elections are determining economics, rather than vice versa," according to Nick Gentle and other members of the product management group at Barclays.

Trump Media & Technology Group, whose stock has been rising and falling with Trump's White House chances, climbed 4.6% to $34.25. Shares of the company behind Trump's Truth Social platform, though, are still well below their perch of roughly $70 reached earlier this year.

In the bond market, Treasury yields rose, as they did Friday immediately following the Biden-Trump debate. Increased prospects for a Republican sweep in November sent traders back to moves from 2016, according to strategists at Morgan Stanley. Besides pushing rates higher, traders also piled into stocks of oil-and-gas and financial companies, among other moves.

The yield on the 10-year Treasury climbed to 4.47% from 4.39% late Friday and from 4.29% late Thursday. It's provided a modest reversal of the general trend since the spring, when the 10-year Treasury yield topped 4.70% in late April.

Yields have been largely easing on hopes inflation will slow enough to convince the Federal Reserve to cut its main interest rate later this year, down from the highest level in more than two decades. High rates have been slowing the U.S. economy by making it more expensive to borrow for a house, car or anything else.

Hopes for rate cuts strengthened after a report on Monday showed U.S. manufacturing weakened last month by more than economists expected. Perhaps even more importantly for Wall Street, the report from the Institute for Supply Management also said price increases are decelerating, even if prices are still rising. Taken together, the data could offer more of the evidence of lessening pressure on inflation that the Federal Reserve wants before it will cut rates.

This week's highlight for economic reports will likely arrive on Friday, when the U.S. government will say how many workers got hired to payrolls during June. Economists predict overall hiring slowed to 190,000 from May's 272,000. That would get the number closer to what Bank of America calls the "Goldilocks" figure of roughly 150,000, give or take 25,000.

At that level, the U.S. economy could continue to grow and avoid a recession without being so strong that it puts too much upward pressure on inflation.

On Wall Street, Chewy swung from a big early gain to a loss of 6.3% after a widely followed trader named Keith Gill revealed he owned just over 9 million shares of the pet supply company. That's about 6.6% of the entire company, according to a filing made Monday with the Securities and Exchange Commission.

Gill came to fame during the original meme-stock craze of 2021 that saw GameStop rally to market-bending heights. Gill, who goes by "Roaring Kitty" and other nicknames, became the face of fans pushing GameStop ever upward. Gill had returned to talking about GameStop again recently, which helped its stock rally. But it fell 7.8% Monday following his disclosure about Chewy.

Elsewhere on Wall Street, Spirit AeroSystems rose 2.8% after Boeing said it would buy the maker of fuselages and other airplane parts for $4.7 billion in stock and assume about $3.6 billion of its debt.

Boeing, which rose 2%, has been facing tougher scrutiny from the government and the airlines who buy its planes over worries about safety and quality. Boeing previously owned Spirit AeroSystems, and the purchase reverses a longtime company strategy of outsourcing key work on its passenger planes.

Meta Platforms fell 1.1% after European Union regulators accused it of breaching the bloc's new digital competition rulebook by forcing Facebook and Instagram users to choose between seeing ads or paying to avoid them.

In stock markets abroad, Japan's Nikkei 225 added 0.1% after a quarterly survey by the Bank of Japan called the "tankan" showed a modest improvement in confidence among the country's largest manufacturers in April through June.

Stocks in Shanghai rose 0.9% following mixed data on the world's second-largest economy.