NEW YORK (AP) — U.S. stocks are rising near records Monday and adding to last week’s gains.
The S&P 500 was 0.4% higher, as of 11:30 a.m. Eastern time, and sitting a bit below its all-time high set two weeks ago. The Dow Jones Industrial Average added 353 points, or 0.8%, to its own record set on Friday, while the Nasdaq composite was 0.6% higher.
Treasury yields also eased in the bond market amid what some analysts called a "Bessent bounce" after President-elect Donald Trump said he wants Scott Bessent, a hedge fund manager, to be his Treasury Secretary.
Bessent has advocated for reducing the U.S. government's deficit, which is how much more it spends than it takes in through tax and other revenue. Such an approach could soothe worries on Wall Street that Trump's policies may lead to a much bigger deficit, which in turn would put upward pressure on Treasury yields.
After climbing above 4.44% immediately after Trump’s election, the yield on the 10-year Treasury fell back to 4.29% Monday, down from 4.41% late Friday. That’s a notable move, and lower yields help make it cheaper for all kinds of companies and households to borrow money. They also give a boost to prices for stocks and other investments.
The two-year Treasury yield, which more closely tracks the market’s expectations for what the Federal Reserve will do with overnight interest rates, also slid.
The Fed began cutting its main interest rate just a couple months ago from a two-decade high, hoping to keep the job market humming after bringing high inflation nearly all the way down to its 2% target. But immediately after Trump's victory, traders reduced bets for how many cuts the Fed may deliver next year. They were worried Trump's preference for lower tax rates and higher spending on the border would balloon the national debt. On Monday, traders went back to increasing their bets for the number of cuts possible in 2025, according to data from CME Group.
A report coming on Wednesday could influence how much the Fed may cut rates. Economists expect it to show that an underlying inflation trend the Fed prefers to use accelerated to 2.8% last month from 2.7% in September. Higher inflation would make the Fed more reluctant to cut rates as deeply or as quickly as it would otherwise.
Goldman Sachs economist David Mericle expects that to slow by the end of next year to 2.4%, but he said inflation would be even lower if not for expected tariff increases on imports from China and autos favored by Trump.
In the stock market, Bath & Body Works jumped 15.6% after delivering stronger profit for the latest quarter than analysts expected. The seller of personal care products and home fragrances also raised its financial forecasts for the full year, even though it still sees a "volatile retail environment" and a shorter holiday shopping season this year.
Much focus has been on how resilient U.S. shoppers can remain, given high prices across the economy and still-high interest rates. Last week, two major retailers sent mixed messages. Target tumbled after giving a dour forecast for the holiday shopping season. It followed Walmart, which gave a much more encouraging outlook.
Another big retailer, Macy's, said Monday its sales for the latest quarter were in line with its expectations, but it will delay the release of its full financial results. It found a single employee had intentionally hid up to $154 million in delivery expenses, and it needs more time to complete its investigation.
Macy’s stock fell 3.4%.
Among the market's leaders were several companies related to the housing industry. Monday's drop in Treasury yields could translate into easier mortgage rates, which could spur activity for housing. Builders FirstSource, a supplier or building materials, rose 8.3% for one of the biggest gains in the S&P 500.
Among homebuilders, D.R. Horton climbed 6.8%, PulteGroup added 6.7% and Lennar rose 5.8%.
In stock markets abroad, indexes moved modestly across much of Europe after finishing mixed in Asia.
In the crypto market, bitcoin was trading around $96,300 after threatening to hit $100,000 late last week for the first time.
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AP Business Writer Elaine Kurtenbach contributed.