Market report

Stocks adrift as investors wait for Fed’s rate meeting

NEW YORK -- U.S. stocks drifted in quiet trading Monday, as Wall Street made few big moves overall in advance of the Federal Reserve's next meeting on interest rates.

The S&P 500 edged up by 3.21 points, or 0.1%, to 4,453.53, coming off its second straight losing week. The Dow Jones Industrial Average rose 6.06, or less than 0.1%, to 34,624.30, and the Nasdaq composite added 1.90, or less than 0.1%, to 13,710.24.

Stocks have been seesawing since early August on uncertainty about whether the Fed is finally done with its interest rate increases. Higher rates have helped cool inflation from its peak last summer, but they also hurt prices for stocks and other investments, while slowing the economy.

Traders almost universally expect the Fed to keep rates steady at its meeting this week, which ends Wednesday. More attention will be on the forecasts Fed officials will publish about where they expect interest rates, the economy and the job market to head in upcoming years.

One of the first the market will fixate on is how high officials at the Fed see its main interest rate rising this year. Traders are betting on a roughly 40% chance the Fed will raise rates again in either November or December, according to data from CME Group.

But just as much attention will be on what Fed officials say about next year when investors expect the Fed to begin cutting interest rates. Investors crave such cuts, which typically loosen up financial conditions and give boosts to financial markets. The big question is by how much the Fed could cut.

Economists at Goldman Sachs expect Fed officials to indicate a full percentage point of cuts next year, after raising rates one more time this year to a range of 5.50% to 5.75%.

Fears are strong that rates may have to stay higher for longer in order to get inflation fully down to the Fed's 2% target. While underlying trends on inflation continue to improve mostly, a recent upswing in oil prices has complicated things.

A barrel of U.S. crude rose 71 cents to $91.48 Monday. That is up from less than $70 in July. Brent crude, the international standard, rose 0.5% to $94.43 per barrel.

Higher prices for gasoline and other fuel were a big reason that inflation that consumers are feeling accelerated last month from 3.2% to 3.7%.

The rise in fuel prices, along with worries about rates staying higher for longer, have helped push up Treasury yields across the bond market.

The 10-year Treasury yield edged down to 4.31% from 4.33% late Friday. It has been mostly climbing since sitting around 3.40% in May.

The two-year Treasury yield, which more closely follows expectations for the Fed, held steady a 5.04%.

Worries about a possible recession also continue to hang around, even though they have diminished with successive reports showing the economy and job market continue to hum.

One worrying factor is where bond yields are, with two-year and other shorter-term yields continuing to remain higher than longer-term yields. That is an unusual occurrence that has often preceded recessions in the past.

On Wall Street, Clorox shares fell 2.4% after it said a cybersecurity attack caused widespread disruptions to its business. It is still measuring the damage, but it said it expects it to be material on upcoming results. Clorox also said it believes the unauthorized activity has been contained.

Ford and General Motors were falling as a limited strike by the United Auto Workers carried into another day. Ford fell 2.1%, and General Motors slipped 1.8%.

Stocks of energy producers, meanwhile, helped to lead the market because of the rise in oil. Exxon Mobil gained 0.8%, and Marathon Petroleum rose 1.6%.

Information for this article was contributed by Matt Ott and Elaine Kurtenbach of The Associated Press.