Wall Street stays in its holding pattern with focus on Fed

New York — U.S. stocks are stuck in their holding pattern Wednesday, as Wall Street waits for a highly anticipated speech about interest rates scheduled for the end of the week.

The S&P 500 was virtually unchanged in early trading. The Dow Jones Industrial Average was down 24 points, or 0.1%, at 32,884, as of 9:54 a.m. Eastern time, and the Nasdaq composite was 0.1% higher.

It’s setting up to be a second straight day of modest moves for the market, but they follow some severe swings up and down over the prior weeks.

Stocks drove higher through the summer on hopes that inflation was near its peak and the Federal Reserve may hike interest rates by less aggressive margins than earlier feared. But recent comments by Fed officials have cooled such expectations, while discouraging reports on the economy have pile up to highlight the risk of a recession.

That’s why Wall Street’s focus is centered on Friday, when Fed Chair Jerome Powell is scheduled to give a speech at an annual economic symposium in Jackson Hole, Wyoming. It’s been the setting for several major market-moving speeches in the past, and investors are hoping for more clarity on which way the Fed is leaning on future rate hikes.

Higher interest rates slow the economy in hopes of undercutting inflation. But they also risk choking off the economy if done too aggressively, and they pull down on prices for all kinds of investments.

Also scheduled for Friday is the latest reading on the Federal Reserve’s preferred method of measuring inflation.

Treasury yields have been rising recently, partly on anticipation that the Fed will continue to lean toward raising rates aggressively to quash the worst inflation in decades. The two-year yield, which tends to track expectations for the Fed, rose to 3.33% from 3.30% late Tuesday.

The 10-year yield, which helps set rates for mortgages and many kinds of loans, rose to 3.08% from 3.05% after a report showed that U.S. orders for long-lasting goods were flat in July. After ignoring transportation, though, growth was stronger than economists expected.

Earnings reports helped drive trading for some stocks, as the last companies of the reporting season describe how they fared during the spring.

Nordstrom sank 17.1% after it cut its financial forecast for the year, though it reported stronger profit for the latest quarter than expected. It’s the latest major retailer to say it’s struggling to keep up with its customers’ changing shopping patterns. The industry is facing mountains of unsold inventory, as shoppers make fewer trips to stores and demand discounts when they do enter.

Advance Auto Parts slumped 9.4% after its quarterly results fell short of expectations. The auto parts retailer said its do-it-yourself customers are getting squeezed by high inflation and gasoline prices well above where they were a year ago.

On the winning side was Intuit, the company behind TurboTax. It rose 6.6% after delivering stronger results for the latest quarter than expected. It also gave a forecast for revenue this upcoming fiscal year that topped some analysts’ expectations.

Markets overseas were mixed, with stocks in Shanghai sinking 1.9% but South Korean stocks up 0.5%.

Crude oil prices were holding relatively steady after climbing earlier in the week.

AP Business Writer Yuri Kageyama contributed.

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