Stock market today: Wall Street drifts near records as bond yields recover some of last

NEW YORK (AP) — U.S. stocks are drifting in quiet trading Monday ahead of what could be a quiet, holiday-shortened week.

The S&P 500 was virtually unchanged in morning trading and near its record set on Thursday, though most of the stocks within the index were falling. The Dow Jones Industrial Average was down 107 points, or 0.43%, as of 10:10 a.m. Eastern time, and the Nasdaq composite was flat.

Treasury yields were rising in the bond market, which added some pressure on the stock market. The climb in yields erased some of the slack created last week when better-than-expected reports on inflation raised hopes that the Federal Reserve will cut interest rates later this year.

This upcoming week has few top-tier economic reports for the United States, outside of Tuesday’s update on how much customers are spending at U.S. retailers and Friday’s preliminary look at the state of U.S. business activity. Markets will also be closed Wednesday for the Juneteenth holiday.

A report on Monday said manufacturing in New York state is still contracting, though not by as much as economists expected. Manufacturing has been one of the areas hardest hit by the Federal Reserve’s zeal to keep its main interest rate at the highest level in more than two decades.

The Fed is trying to hold rates high for long enough to slow the economy and snuff out high inflation, but it wants to cut rates and reverse the momentum in time so the slowdown doesn’t turn into a painful recession.

High interest rates hurt all kinds of investments, and they tend to hit some areas particularly hard. Real-estate stocks, for example, can struggle when high rates make conditions tougher for the industry and draw income-seeking investors away from them and toward bonds.

Real-estate investment trusts in the S&P 500 fell 1% for the worst loss among the 11 sectors that make up the index. Close behind was a 0.9% drop for utilities, whose relatively big dividends likewise tend to see less interest from buyers when bonds are paying more in interest.

Helping to work against them was Autodesk. It rose 4.6% after an investment firm said it will try to delay the software company’s annual meeting so that it can nominate new directors for the board. Starboard Value also outlined how it says Autodesk hasn’t performed as well financially as it should have.

Chip company Broadcom also rose 4.5% to add to gains from last week after it reported better profit than expected and said it would undergo a 10-for-one stock split to make its price more affordable. It followed Nvidia, the company that’s become the poster child of Wall Street’s frenzy around artificial-intelligence technology and just executed a similar split.

Broadcom was one of the strongest forces pushing the S&P 500 upward, along with a 1.6% rise for Apple.

In the bond market, the yield on the 10-year Treasury climbed to 4.29% from 4.22% late Friday. The two-year Treasury yield, which more closely tracks expectations for the Fed, rose by less. It climbed to 4.74% from 4.71%.

In stock markets abroad, European indexes calmed somewhat following last week’s rout. France’s CAC 40 rose 0.5% after tumbling last week to its worst week in two years on worries that potential losses by the president’s centrist party could lead to sharply higher debt for the country.

The modest gains for Europe followed losses in Asia. Japan’s Nikkei 225 dropped 1.8%.

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AP Business Writer Elaine Kurtenbach contributed.