Tesla Powers Wall Street Higher Ahead Fed Rate Cut/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks edged higher Monday, with the S&P 500 and Nasdaq climbing toward fresh records as Tesla soared after Elon Musk’s $1 billion stock buy. Nvidia slipped following a Chinese antitrust probe, while global markets showed modest gains. Investors now await the Federal Reserve’s crucial rate-cut decision on Wednesday.
Wall Street’s Record-Bound Rally: Quick Looks
- Market Gains: S&P 500 up 0.4%, Nasdaq up 0.5%, Dow up 43 points.
- Tesla Soars: Shares jump 7.2% after Musk’s $1B stock purchase.
- Nvidia Hit: Stock falls 1.6% amid China antitrust investigation.
- Fed Watch: First 2025 interest rate cut expected Wednesday.
- High Stakes: Markets priced in multiple cuts through 2026.
- Powell in Focus: Fed Chair’s press conference could move markets.
- Risks Remain: Inflation and a weakening job market still threaten growth.
- Trump Pressure: President urges deeper, faster Fed cuts, attacks Powell.
- Global Markets: France’s CAC 40 rose 1%; Asia, Europe posted smaller gains.
- Bond Market: 10-year Treasury yield dips to 4.04%.
Deep Look: Wall Street Pushes Toward Record Highs as Tesla Rally Offsets Nvidia Losses and Fed Decision Looms
NEW YORK (AP) — Wall Street opened the week in positive territory, with stocks edging higher as investors balanced optimism over Federal Reserve rate cuts with ongoing concerns about inflation, global trade, and corporate performance.
The S&P 500 gained 0.4%, hovering near its latest all-time high set just last week. The Dow Jones Industrial Average added 43 points, or 0.1%, while the Nasdaq Composite rose 0.5% in early trading.
Tesla Roars Back With Musk’s $1 Billion Bet
Leading the charge was Tesla, whose shares jumped 7.2% after CEO Elon Musk revealed he had purchased roughly $1 billion worth of stock through a trust.
The electric vehicle giant’s stock had been lagging in 2025, entering Monday with a slight year-to-date decline. Musk’s personal investment was interpreted by traders as a vote of confidence in Tesla’s long-term prospects, boosting sentiment around one of Wall Street’s most-watched companies.
Nvidia Slips Amid Chinese Antitrust Probe
The State Administration for Market Regulation issued a brief statement promising a “further investigation” but stopped short of announcing penalties. The move comes amid heightened U.S.–China tensions over trade and technology, with semiconductor firms caught in the middle.
All Eyes on the Federal Reserve
While individual stocks drove much of Monday’s market action, investors remain laser-focused on the Federal Reserve’s Wednesday meeting, where policymakers are widely expected to announce the first interest rate cut of 2025.
Markets have already priced in aggressive easing through the rest of 2025 and into 2026. If the Fed cuts less than expected—or signals a more cautious path—stocks could retreat from their record levels.
The greater focus will likely fall on Chair Jerome Powell’s press conference, where his guidance on inflation, growth, and long-term rates could set the tone for months.
Inflation, Jobs and Tariffs Pose Risks
The Fed’s decision comes against a backdrop of mixed economic signals:
- Inflation: Still above the Fed’s 2% target, with Trump’s tariffs adding potential upward pressure.
- Job Market: Slowing employment growth raises recession concerns, as weaker corporate profits could outweigh the benefits of lower borrowing costs.
Should inflation heat up or unemployment spike, the Fed may be forced to alter its easing trajectory, unsettling markets.
Trump Turns Up the Heat
President Donald Trump has been pressing for deeper, faster rate cuts, using his social media platform Monday to demand urgent action.
“‘Too Late’ must cut interest rates now, and bigger than he had in mind,” Trump wrote, reviving his nickname for Powell.
Trump has even suggested removing a Fed governor from the board, underscoring the political pressures surrounding monetary policy.
Bonds and Global Markets Show Optimism
In the bond market, expectations of Fed easing drove Treasury yields lower. The 10-year yield fell to 4.04%, down from 4.06% on Friday.
Overseas, France’s CAC 40 climbed 1%, while other European and Asian markets posted more modest gains, reflecting cautious optimism ahead of the Fed’s decision.
Market Outlook: Record Highs With Caution
With U.S. stocks perched at record levels, this week could be pivotal. A supportive Fed could propel equities higher, especially with Tesla reigniting enthusiasm in the EV sector. But disappointment in Powell’s tone—or renewed inflationary pressure—could just as easily trigger a pullback.
For now, Wall Street is betting that the Fed will deliver the relief it has been waiting for.
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