Stock market today: Wall Street drifts after French market rises following election results

Forex traders walk past a screen displaying the Korea Composite Stock Price Index (KOSPI), left, and the exchange rate between the U.S. dollar and the South Korean won at a currency exchange in Seoul, South Korea, Monday, July 1, 2024. (AP Photo/Lee ​​Jin-man)

NEW YORK (AP) — U.S. stocks are higher Monday after the French market rose, as elections continue to cause swings in financial markets around the world.

The S&P 500 rose 0.2% in afternoon trading as it began a shortened four-day week that includes the July 4 holiday. The Dow Jones Industrial Average was up 65 points, or 0.2%, as of 12:51 p.m. ET, and the Nasdaq Composite Index was up 0.7%.

Some of the world’s strongest action occurred across the Atlantic, where the CAC 40 index in Paris jumped 2.8% before stabilizing at a 1.1% gain. The results in France suggest that a far-right political party may fail to secure a decisive majority in the country’s legislative elections. This opens the door for France to avoid a worst-case scenario for financial markets, where such a victory could give rise to policies that would significantly increase French government debt and other challenges.

It’s an important year for elections around the world, with voters heading to the polls in the UK later this week and elsewhere soon. In the United States, pollsters are weighing the fallout from last week’s debate between President Joe Biden and former President Donald Trump. All of this underscores “political polarization and how elections determine the economy, rather than the other way around,” according to Nick Gentle and others in the product management group at Barclays.

Trump Media & Technology Group, whose stock has risen and fallen as Trump’s chances of winning the White House fluctuate, rose 2.6 percent to $33.58. Shares of the company behind Trump’s Truth Social platform, however, remain well below their level of about $70 earlier this year.

In the bond market, Treasury yields rose, as they did on Friday immediately after the Biden-Trump debate. Heightened prospects of a Republican victory in November have sent traders back to the moves of 2016, according to Morgan Stanley strategists. In addition to pushing rates higher, traders also invested in shares of oil and gas companies and financial companies, among other moves.

The yield on the 10-year Treasury note climbed to 4.48%, up from 4.39% late Friday and 4.29% late Thursday. That represents a slight reversal of the broad trend since the spring, when the 10-year Treasury yield topped 4.70% in late April.

Yields have fallen largely on hopes that inflation will slow enough to convince the Federal Reserve to cut its main interest rate later this year from the highest level in more than two decades. High rates slow the U.S. economy by making it more expensive to borrow money for a home, car, or other asset.

Hopes for rate cuts grew stronger after a report Monday showed that the U.S. manufacturing sector weakened more than economists had expected last month. Perhaps more importantly for Wall Street, the Institute for Supply Management report also indicated that price increases are slowing, even as prices continue to rise. Taken together, the data could offer more evidence of the easing inflation pressures the Fed wants before cutting rates.

This week’s high point for economic reports will likely come on Friday, when the U.S. government announces how many workers were hired in June. Economists forecast a slowdown in overall hiring to 190,000 from 272,000 in May. That would bring the number closer to what Bank of America calls the “Goldilocks” number, or about 150,000, to about 25,000.

At this 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 gain in early trading to a 5.8% loss after a widely followed trader, Keith Gill, revealed he owns just over 9 million shares of the pet supply company. That represents about 6.6% of the entire company, according to a filing Monday with the Securities and Exchange Commission.

Gill rose to fame during the initial meme stock craze of 2021 that saw GameStop reach all-time highs in the market. Gill, who goes by “Roaring Kitty” and other nicknames, has become the face of fans pushing GameStop ever higher. Gill had started talking about GameStop again recently, which helped its shares rally. But it fell 6% on Monday following its revelation on Chewy.

Elsewhere on Wall Street, Spirit AeroSystems rose 3.8% after Boeing said it would buy the maker of fuselages and other aircraft parts for $4.7 billion in stock and assume about $3.6 billion dollars of its debt.

Boeing, which rose 2.5%, faces increased scrutiny from the government and airlines that buy its planes over concerns about safety and quality. Boeing previously owned Spirit AeroSystems, and the acquisition reverses a long-standing strategy of outsourcing key tasks on its jetliners.

Meta Platforms fell 0.4% after European Union regulators accused it of violating the bloc’s new digital competition rules by forcing Facebook and Instagram users to choose between seeing ads or pay to avoid them.

In overseas stock markets, Japan’s Nikkei 225 index gained 0.1% after a quarterly Bank of Japan survey, called “tankan”, showed a modest improvement in sentiment among the country’s biggest manufacturers from April to June.

Shanghai shares rose 0.9% after mixed data on the world’s second-largest economy.

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AP journalists Matt Ott and Zimo Zhong contributed to this article.