Stock market today: Wall Street sticks near its lowest level since June as stocks drift

NEW YORK (AP) — Wall Street is holding near its lowest level since June, as stocks drift in early trading.

The S&P 500 was 0.1% lower and still on track for its worst month of the year by far. The Dow Jones Industrial Average was down 23 points, or 0.1%, at 32,526, as of 9:43 a.m. Eastern time, and the Nasdaq composite was 0.4% lower.

Micron slumped 4.1% for one of the market’s sharper losses despite reporting better results for the latest quarter than analysts expected. Its forecast for upcoming profitability fell short of some analysts’ estimates.

Stocks have widely tumbled this month as Wall Street increasingly accepts a new normal where interest rates will stay high for a while. The Federal Reserve has already pulled its main interest rate to the highest level since 2001 in hopes of extinguishing high inflation, and it indicated last week it may cut rates by less next year than earlier expected.

It’s a sharp departure from prior years of investing, where Wall Street counted on the Fed to cut rates quickly and sharply when things looked dicey. High rates slow the economy by design, and they hurt prices for stocks and other investments.

The threat of higher rates for longer has pushed Treasury yields up sharply in the bond market, and they rose further into heights unseen in more than a decade. The yield on the 10-year Treasury rose to 4.67% from 4.61% late Wednesday. It was at roughly 3.50% in May and just 0.50% early in the pandemic.

The two-year Treasury yield, which moves more on expectations for Fed action, slipped to 5.10% from 5.14%.

Yields squiggled after the latest batch of reports on the economy. One said that fewer workers applied for unemployment last week than economists expected.

The job market has remained surprisingly solid despite much higher interest rates and has helped fuel strong spending by households. That has been one of the main reasons the economy has been able to avoid a long-predicted recession, but it also may be feeding upward pressure into inflation.

A separate report said the U.S. economy grew at a 2.1% annual rate during the summer, following some revisions to earlier estimates. That was slightly below economists’ expectations, but economic growth looks like it’s remained solid through the third quarter at least. The question is how the trend goes in the final three months of the year.

Altogether, the reports didn’t give anything to change investors’ minds about the Fed staying tough on interest rates, something that Wall Street calls a “hawkish” stance on policy.

“The waiting game continues,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.

“Until there’s a clear break from this holding pattern, investors will be living with a hawkish Fed, higher-for-longer interest rates and, likely, additional market volatility,” he said.

Many other challenges are also looming over the economy and Wall Street besides the threat of higher interest rates for longer.

Most immediate is the threat of another U.S. government shutdown as soon as this weekend, though financial markets have held up rather well during past shutdowns.

Another looming threat eased a bit, as crude oil prices pulled back following their sharp leap this year. A barrel of benchmark U.S. crude oil fell 1% to $92.70 after reaching its highest level in more than a year on Wednesday. It’s still up sharply from below $70 during the summer, which has added to worries about inflation.

Brent crude, the international standard, fell 0.7%, to $93.73 per barrel.

On Wall Street, GameStop rose 2.5% after the company named billionaire Ryan Cohen, the video game retailer’s largest individual investor, as its CEO. The CEO job at GameStop, the original so-called “meme stock,” has become a rotating door with the company trying to survive as technology upends the gaming industry.

Peloton climbed 10.1% after the online exercise bike and fitness company announced a five-year partnership with athletic wear maker Lululemon Athletica. The collaboration makes Peloton the exclusive digital fitness content provider for Lululemon, which will take on the role as Peloton’s primary athletic apparel partner.

In stock markets abroad, the Hang Seng fell 1.4% in Hong Kong after trading in shares of heavily indebted Chinese property developer China Evergrande Group was suspended. That followed media reports that the chairman of Evergrande, Hui Ka Yan, had been taken away earlier this month and placed under police watch.

Evergrande is the world’s most heavily indebted real estate developer and is at the center of a property market crisis that is dragging on China’s economic growth.

Stock indexes were mixed elsewhere in Asia and Europe.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.