NEW YORK (AP) — Wall Street rose to more records on Monday at the start of a week that could show whether the U.S. stock market’s big recent rally has been overdone or prescient.
The S&P 500 climbed 0.5% and topped its prior all-time high, which was set last week. The Dow Jones Industrial Average rose 49 points, or 0.1%, and the Nasdaq composite added 0.9% to its own record.
Tesla helped lead the way and rose 3.6% after Elon Musk bought stock worth roughly $1 billion through a trust. The electric vehicle company’s stock price came into the day with a slight loss for the year so far, and the purchase could be a signal of Musk’s faith in it.
Alphabet was the single strongest force lifting the S&P 500 after gaining 4.5%, which brought the total value for Google’s parent company above $3 trillion. Nvidia, Microsoft and Apple are the only other companies on Wall Street worth that much.
The market’s main event for the week will arrive on Wednesday. That’s when the Federal Reserve will announce its latest decision on interest rates, and the unanimous expectation is for the first cut of the year. Such a move could give a kickstart to the job market, which has been slowing.
Stocks have already run to records on the assumption that a cut is coming on Wednesday, though. Expectations are also high that the Fed will keep lowering rates through the end of this year and into 2026. That creates the possibility for disappointment in the market, which would mean drops for stock prices, if the Fed doesn’t end up slashing rates as aggressively as traders expect.
That’s why more attention will be on what Fed Chair Jerome Powell says in his press conference following the decision than on the decision itself. Fed officials will also release their latest projections for where they see interest rates and the economy heading in upcoming years, which could provide another potential flashpoint.
What’s keeping the Fed on guard is a possible jump in inflation because of President Donald Trump’s tariffs. That’s because lower interest rates can give inflation more fuel and send it even higher. And inflation has already proven difficult to get under the Fed’s 2% target.
Another threat for Wall Street is if the job market slows too much. In that case, a recession could create a downturn in corporate profits that’s steep enough to swamp the benefits that lower interest rates bring in the near term.
Trump, meanwhile, has pushed angrily for cuts to interest rates. He’s often attacked Powell personally, nicknaming him “Too Late,” and is trying to remove one of the Fed’s governors from its board.